Sights of a storm have appeared in the financial world.
Silicon Valley Bank (SVB) was bank number 16 of the United States with assets of 209 billion dollars.
Last Friday, the financial authorities intervened and closedwith what was given the largest bank failure in the United States since 2008.
Yesterday, in addition, the US financial authority made the decision to close the Signature Bank, an institution specialized in crypto assets.
The financial markets became very nervous before the two facts.
During Thursday and Friday the stocks of almost the whole world collapsed. For example, the Nasdaq index fell by almost 3.8 percent in those two days.
The fall of the SVB has direct and indirect effects.
The direct ones point to the market it served: the startups from San Francisco.
There will be those who are left financially stranded before the closure of the SVB.
But what is most worrying is the indirect impact: the fear of bankruptcy of this bank could prelude the collapse of othersas already seen.
Beyond the specific reasons for the collapse of the SVB, the origin was in the impact that it had on the bank’s balance sheet the rise in interest rates that the Federal Reserve has applied.
It is the ABC of finances, that when rates go up, bond prices go down. And if there are institutions that have a large amount of bonds on their balance sheets, they could eventually be forced to liquidate at very low prices, as that bank did, turning losses into losses, which in turn led to a run and with it the ruin of the institution.
Everything indicates that, for now, given the rapid reaction of the authorities risk has been contained. The bankruptcy of the SVB It’s not going to be a new Lehman Brothers and there is no financial crisis at hand.
But the fact does show the fragility of financial institutions that seemed free of all risk.
This fact was also combined with the employment figures that were released last Friday and that They continue to show an economy that has great momentum.
For this reason, it is very possible that more rate hikes will come to lower inflation.
The problem is that higher rates increase risk of repeating cases such as the SVB.
It is not the only open front. In Europe, for a few weeks now, the Credit Suisse It is in serious trouble and the fall of the SVB brought the share price of the major Swiss bank to an all-time low.
The signal cannot be ignored.
Past rate hikes have brought with them episodes of global financial instability.
It may be that the lessons of previous crises help contain the most pernicious effects of this circumstance.
But, it can also happen that, as on other occasions in which the values of financial assets have had to adjust quickly, imbalances occur that generate a large imbalance.
We do not know for sure.
The obvious question is if in Mexico we are sheltered before these facts.
It must be recognized that there is no way to cover yourself completely.
But, we do not have a significant risk in banking matters either. Our system looks very solid.
But it is not impossible that it can unleash a wave of risk aversion Worldwide.
And with it, inevitably, the exchange rate of the peso against the dollar would end their honeymoonhe, to go up.
But, in addition, conditions would be created to keep interest rates high for a long time, with a greater impact on economic activity as well.
The bankruptcy of the SVB puts us on notice once again that, although there are good signs in the economy, financial risks are still present.
You must not lose sight of them.
