SEOUL: The collapse of the United States-based Silicon Valley Bank (SVB) is expected to have a limited impact on the global financial market, although uncertainties will linger amid monetary-tightening moves, reported Yonhap quoting the finance minister on Monday.
Last week, US banking regulators shut down the startup-focused lender SVB Financial Group and took control of its customer deposits in the largest failure of a US bank since the 2008 financial crisis, sparking concerns over its impact on the global financial market.
“Following reports over the shutdown of Silicon Valley Bank in the US over the weekend, volatilities and uncertainties in the financial market at home and abroad have been escalating,“ Finance Minister Choo Kyung-ho said ahead of a closed-door meeting on export issues.
Choo, however, added experts still believe that the incident is likely to have limited impacts on the global economy, with US financial authorities also making prompt efforts to protect depositors.
The minister pointed out uncertainties, however, will remain in the global economy due to aggressive monetary tightening moves, adding the government will come up with additional support measures to help exporters.
The industry ministry held an emergency meeting with relevant agencies to assess the impact of the bank’s failure on exporters, and to discuss ways to minimise the possible fallout.
The government plans to beef up monitoring of the related developments on a real-time basis, and to come up with response mechanisms in cooperation with private companies, though the case has not directly affected exports, the ministry said.
The incident took place at a time when South Korea has been struggling to buttress its key economic growth engine of exports amid weak global demand for semiconductors and other major industry items amid a global economic slowdown.
South Korea’s exports fell 16.2 per cent on-year in the first 10 days of March due to sluggish shipments of chips. The country’s exports from Jan 1 to Friday sank 12.6 per cent from the previous year, with its trade deficits reaching US$22.7 billion so far, according to government data. –Bernama
