KUALA LUMPUR, March 14 – Minister of Economy, Rafizi Ramli explained that the collapse of the United States (US) bank, Silicon Valley Bank (SVB) could have some impact on a small scale to Malaysia if the development affects the country’s capital and banking market. However, Rafizi said, the country may not be directly affected by the collapse of SVB since no local company has deposits in the bank.
“The direct effect may not be there, no Malaysian company has money in SVB. On average only large startups in Silicon Valley have accounts on SVB. But if the fall drags US banking and capital markets down for a while, it might give us some headwinds even on a smaller scale,” he said in a tweet on Monday. He responded to the comment after answering a question regarding the issue of the wave of collapse of the 16th largest bank in the US which is claimed to hit the financial market in this country.
SVB is the largest retail bank to fail since the 2008 financial crisis. The bank’s problems escalated after a year-long Federal Reserve (Fed) interest rate hike meant that the securities it owned were sold at significantly lower prices, a problem other banks are likely to face. The collapse of SVB, which specialized in venture capital funding mainly in the technology sector, came after depositors withdrew so much of their savings that it could no longer operate on its own.
