Germany’s central bank (Bundesbank) convened its own crisis team today to assess the potential impact of the collapse of the US Silicon Valley bank on the domestic market, but an emergency meeting of the European Central Bank (ECB) is not expected.

US authorities yesterday took emergency measures to boost confidence in the banking system as the failure of Silicon Valley Bank threatened to trigger a wider financial crisis.

The meeting of the anti-crisis team of the Bundesbank takes place against the backdrop of falling shares of eurozone banks: shares of Commerzbank fell by 11%, and Deutsche Bank – by 6.5%.

For euro area banks, decisions are made by national supervisors for smaller banks and by the ECB supervisor for larger ones.

A senior source in the ECB’s banking supervisory body said the ECB has not held and will not hold any extraordinary meetings until the next scheduled meeting on March 23-24.

Also, no announcements are expected from the ECB’s Governing Council, which makes decisions on monetary policy.

The ECB source noted that eurozone banks are generally well funded and have done a good job of converting their bonds into held-to-maturity portfolios, meaning they are not forced to reflect losses from lowering their prices due to higher interest rates. rates.

The same source noted that eurozone banks tend to have a more conservative asset mix than a Silicon Valley bank, which lends mostly to high-risk technology startups.

The source does not see any immediate repercussions for eurozone banks from the collapse of the SVB, but warned that this could change if influence in the US spreads to larger banks, raising the risk of dominoes.

Source: APE-MPE, Reuters.