The bankruptcy of Silicon Valley Bank, a ball of oxygen for the mortgaged: the Euribor collapses

The bankruptcy of Silicon Valley Bank, a ball of oxygen for the mortgaged: the Euribor collapses

He Silicon Valley Bank (SVB) was a perfect stranger to the common Spaniards until a few days ago it went bankrupt -later Silvergate Bank and Signature Bank did- and the fear that it will unleash another financial crisis It has put the whole world in a state of alarm. A fear that, paradoxically, can end up being relief, albeit temporary, for thousands of mortgagees. If until now it was taken for granted that both the Federal Reserve (Fed) and the European Central Bank (ECB) would continue raising interest rates to curb the rampant inflation that exists on both sides of the Atlantic, now there are many who think that both will stop this escalation so that there is enough liquidity in the system to avert another possible financial crisis. Goldman Sachs directly believes that the Fed, "in light of the stress in the banking system," will not raise rates at its next meeting. A forecast that is shared by more analysts such as the economist Ken Kuttner, a professor at Williams College and who, asked by Efe, also believes that there will be no increases at the next meeting; and that it will be necessary to see if it conditions the ECB, which had announced another half-point rise in interest rates of the eurozone to take them to 4% after their meeting next Thursday.

The expectation of this cooling in the rise in interest rates has meant that, in just two days, the euribor has plummeted almost half a point and, from close to 4%, has dropped to 3.84% on a monthly average. A relief for the mortgaged that will have to be seen if it is temporary or if it consolidates if the problems of the US banking system worsen and spread throughout the world. For practical purposes, the containment of the Euribor means for the moment that for a variable mortgage of 180,000 euros at 25 years, with a Euribor differential of 1% and an annual review, it will go from paying a fee of 659 euros to paying 1035 euros, 376 more. In the event that the review is semi-annual, the increase will be much smaller since in the previous review they did so with a fairly high Euribor. Specifically, it will rise 160 euros per month.


For now, analysts are inclined to think that the risk of another financial crisis like the one that devastated the world in 2008 is limited. Moody's believes that the different structure prevailing in the balance sheets of European banks limits the risk of contagion. The rating agency considers "a critical difference" between the European and US systems, which will limit the impact, that European banks' bond holdings are lower and their deposits more stable. However, the risk rating agency has worsened its outlook on the US banking system, lowering it to "negative" from "stable", to reflect the rapid deterioration in the operating environment following the collapse of (SVB) entities. , Silvergate Bank and Signature Bank (SNY). Although Moody's believes that the scheme activated by the Fed to protect the system, the Bank Term Funding Program (BTFP), is constructive, it expects that the pressures will persist and will be exacerbated by the current tightening of monetary policy, in addition to the increase in costs of deposits, which rit will reduce the profits of banks, particularly those with a higher proportion of fixed-rate assets.

BBVA ResearchFor his part, he ruled out that bankruptcies in the US could cause a possible run on deposits that would put at risk a banking system that, in his opinion, is "solvent". This analytics service believes that SVB has fallen due to "rather strange or even negligent" management of a niche bank.

From the Government, the Vice President for Economic Affairs, Nadia Calviño, has insisted this Tuesday on her message of tranquility and "maximum prudence" following the collapse of SVB, but has also made a call to "complete" the banking union with crisis management instruments and a common deposit guarantee fund. "These events highlight the need to move forward as soon as possible to complete and strengthen the banking union," he said at the press appearance after the meeting of the European Union's Economy and Finance Ministers (Ecofin). Along these lines, Calviño has guaranteed that "during the Spanish presidency (of the EU) it will be a priority" to complete the banking union project with new crisis management tools and a common deposit guarantee systemtwo pillars that have been stranded for years due to the divisions in this regard that exist among the Twenty-seven.