Silicon Valley Bank collapse presents low risk for Canadian sector: analysts
BNN Bloomberg
As regulators move to address the stunning collapse of Silicon Valley Bank, analysts say there is limited fallout risk for the Canadian financial sector.
"Not only should the failure of Silicon Valley Bank not have significant negative implications for our banks, but this crisis should actually be viewed as further vindication of the Canadian banking model," said Scotiabank analyst Meny Grauman in a client note Monday, highlighting the stability of Canada's diversified major banks.
U.S. regulators closed the California-based bank on Friday after a bank run, where fearful depositors concerned about its solvency withdrew billions of dollars all at once. Over the weekend U.S. regulators announced measures to safeguard the financial system, including a guarantee that all deposits at the bank would be honoured. They promised the same for Signature Bank, which regulators forced closed on Sunday.
Canada's banking regulator said late Sunday that it had seized the Canadian assets of Silicon Valley Bank, while emphasizing the limited nature of the crisis and the fact that the bank doesn't hold any commercial or individual deposits in Canada.
