Canada Government assures jittery customers after collapse of SVB Bank

“Money won’t make you happy… but everybody wants to find out for themselves.”

Following the shocking collapse of a major US bank, Silicon Valley Bank, the Government of Canada has assured jittery customers that Canadian banks are safe.

Finance Minister Chrystia Freeland met with the head of Canada’s financial regulator in the wake of a US regional bank collapse, with her office emphasizing that domestic financial institutions are secure.

Adrienne Vaupshas, Freeland’s spokesperson, said: “Significant structural and regulatory safeguards are already in place in Canada. The government wants to assure Canadians our financial institutions are stable and resilient.”

Vaupshas said Freeland met with Peter Routledge, Canada’s superintendent of financial institutions, one day after his office announced it had seized control of SVB Financial Group’s branch in Canada. US regulators shut down its California-based Silicon Valley Bank on Friday.

Freeland has issued two brief statements but hasn’t spoken publicly since the collapse of SVB and New York-based Signature Bank. Yields on short-term Canadian government bonds are falling at the fastest rate in decades as investors reverse course and bet the Bank of Canada will start cutting rates in the coming months.

The finance minister’s office said she has also convened meetings with the heads of national and regional Canadian financial institutions, which were attended by Routledge and Bank of Canada Governor Tiff Macklem. The central bank has so far not made any public statements about the market turmoil.

How Twitter and social media killed SVB Bank

Canada Government assures jittery customers after collapse of SVB Bank

The massive amount of customer withdrawals that led to the collapse of Silicon Valley Bank had all the hallmarks of an old-fashioned bank run, but with a new twist befitting the primary industry the bank served: much of it unfolded online.

Customers withdrew $42 billion in a single day last week from Silicon Valley Bank, leaving the bank with $1 billion in negative cash balance, the company said in a regulatory filing. The staggering withdrawals unfolded at a speed enabled by digital banking and were likely fueled in part by viral panic spreading on social media platforms

References:

CNN

Bloomberg