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Friday, Apr 19, 2024

"Major Crisis" In Tech Industry: Israel PM On Silicon Valley Bank Collapse

"Major Crisis" In Tech Industry: Israel PM On Silicon Valley Bank Collapse

Netanyahu said that he's been in touch with senior Israeli tech figures following the collapse of Silicon Valley Bank in the United States.
Israeli Prime Minister Benjamin Netanyahu warned on Saturday that the implosion of Silicon Valley Bank (SVB), the second largest bank failure in US history, created a deep crisis in the technology industry.

"I am closely monitoring the collapse of the American investment bank, Silicon Valley Bank, which has led to a major crisis in the high-tech world," tweeted the Prime Minister of Israel.

Netanyahu said that he's been in touch with senior Israeli tech figures following the collapse of Silicon Valley Bank in the United States.

"If necessary, out of responsibility to Israeli high-tech companies and employees, we will take steps to assist the Israeli companies, whose center of activity is in Israel, to weather the cash-flow crisis that has been created for them due to the turmoil," he tweeted.

Meanwhile, Netanyahu said that the Israeli economy is strong and stable, adding "which finds expression in this crisis as well."

Netanyahu, who is in Rome for an official visit, said he would discuss the extent of the crisis with his finance and economy ministers and the central bank governor once he returned home.

"From Rome I have held talks with senior high-tech figures in Israel. Upon my return to Israel I will discuss the scope of the crisis with the Finance and Economy ministers and the Governor of the Bank of Israel," tweeted Netanyahu.

Netanyahu assured Israeli tech companies banking with SVB that his government would help affected Israeli businesses overcome the liquidity crisis.

The SVB collapse has sent ripples across the tech industry in the United States, the United Kingdom and other countries, including Israel, where the tech lender has branches.

US regulators on Friday (local time) shut down Silicon Valley Bank, as markets fretted over possible contagion from the biggest banking failure since the 2008 financial crisis.

California regulators closed down the tech lender and put it under the control of the US Federal Deposit Insurance Corporation (FDIC).

The FDIC is acting as a receiver, which typically means it will liquidate the bank's assets to pay back its customers, including depositors and creditors.

Silicon Valley Bank collapsed after a stunning 48 hours in which a bank run and a capital crisis led to the second-largest failure of a financial institution in US history.

Silicon Valley Bank's decline stems partly from the Federal Reserve's aggressive interest rate hikes over the past year.

After years of interest rates hovering around zero, the central bank last spring began a series of historic rate hikes to make borrowing for businesses and individuals more expensive -- a way to cool the economy and bring inflation in line.

Silicon Valley Bank is the first FDIC-insured institution to fail this year. The last FDIC-insured institution to close was Almena State Bank, Almena, Kansas, on October 23, 2020.
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