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© Reuters. SVB (Silicon Valley Bank) logo and EU flag are seen in this illustration taken March 12, 2023. REUTERS/Dado Ruvic/Illustration
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By Huw Jones
LONDON (Reuters) -Silicon Valley Bank had only a limited presence in the European Union, but its collapse shows why lightly regulated foreign lenders need to meet stricter rules inside the EU, the bloc's financial services chief said on Wednesday.
The collapse of the U.S. lender continued to roil banking shares in Europe on Wednesday as investors worried about the resilience of global banking systems.
The European index of banking shares fell 7%, with more than 120 billion euros ($126.5 billion) of market value evaporating since March 8.
"Silicon Valley Bank has a very limited presence in the European Union and we are in touch with the relevant supervisory authorities," Mairead McGuinness told the European Parliament.
Two other U.S. lenders - Signature Bank (NASDAQ:SBNY) and Silvergate Bank - have also collapsed in recent days.
"The direct impact of these bank failures on the EU seems to be limited," McGuinness said.
Silicon Valley Bank's situation has "no immediate parallels with EU banks", she said, adding that the EU banking sector is "in overall good shape".
McGuinness said the three U.S. banks that failed were not subject to the strict regulatory requirements for liquidity with which all EU lenders must comply.
"EU supervisory authorities are closely monitoring recent changes in interest rate risk and liquidity conditions, including possible contagion risks," she said.
Silicon Valley Bank was subject to "lighter rules" in the United States, but the tougher international Basel standards should apply to banks that have operations outside their home market, McGuinness said.
($1 = 0.9486 euros)
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