Silicon Valley Bank’s collapse could force the RBA and the US Federal Reserve to pause planned rate hikes, but experts agree Australia’s banking system is safe.
Silicon Valley Bank’s collapse could force both the Reserve Bank and the US Federal Reserve to pause planned rate rises if actions by US regulators fail to limit financial contagion, but experts agree thatThe US Treasury and Federal Reserve announced on Sunday that all depositors at the failed Silicon Valley Bank, and set up a new line of funding to stem fears of a broader run on America’s regional banks this week.
“In comparison to the US, the Australian banking system is highly concentrated and we do not have banks with the kind of exposure to one geography or industry as SVB does.” “We will continue to work closely with our regulators to understand the implications as the situation evolves.”the Federal Reserve to lift interest rates this month, but left unchanged its projection that the Fed would deliver rate rises of 0.25 of a percentage point in May, June, and July.
RBC chief economist Su-Lin Ong said her base case remained that the RBA would lift rates by 0.25 of a percentage point in April, but she said the potential for financial contagion from SVB raised the risk of a pause, followed by further tightening in the following months.
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