Camille Van Vyve
14 Mar 2023
What is the impact of the bankruptcy of Silicon Valley Bank (SVB) on easyvest customers?
Global stock markets have fallen over the last days, erasing part of the rise recorded since the beginning of the year. At the origin of this sudden drop, the declaration of insolvency of an American bank, the Silicon Valley Bank (SVB).
Why did Silicon Valley Bank collapse?
Silicon Valley Bank (SVB), a California bank with a focus on financing the technology sector, has fallen under the control of the US Federal Deposit Guarantee Agency (FDIC), temporarily blocking all withdrawals for its customers. This takeover follows a massive demand for withdrawals from its customers after the failure of a capital increase aimed at absorbing SVB's losses on bond assets.
How did the markets react?
Raising fears of financial contagion like in 2008, the fall of SVB caused the global equity market to drop circa 5%, a decline of normal magnitude.
How did the US authorities handle the bankruptcy of the SVB?
Since 2008, plans have indeed been drawn up for this type of event. The US authorities therefore reacted quickly to stem any contagion to the rest of the financial system. In addition to the takeover of SVB by the US Federal Deposit Guarantee Agency, a safety net was put in place over the weekend to protect against the insolvency of other US banks.
What protections benefit the assets of easyvest clients?
The assets of easyvest clients are not held by easyvest but deposited with the largest brokerage firm in Belgium, which is financially sound and does not present systemic risk. In addition, all of our clients' cash in euros is deposited with the National Bank of Belgium, offering a maximum level of protection in case of contagion. Our customers also benefit from a guarantee on their deposits of up to €100,000 per holder. Finally, our clients' securities are deposited in segregated accounts under the name of each client, protecting them from the risk of bankruptcy.
What is easyvest's exposure in the event of contagion?
Easyvest has no business relationship with Silicon Valley Bank. It therefore does not directly suffer any consequences of the current situation. As a portfolio management and investment company, easyvest is not a systemic player and is therefore not exposed to the risk of contagion either. With regard to easyvest's treasury, we work with various renowned banks to reduce counterparty risk and guarantee the continuity of easyvest's operations at all times.
Our team of advisors remains at your disposal to answer your questions and help you if needed.