Minimal impact on Thailand from collapse of 2 US banks


FINANCE Minister Arkhom Termpittayapaisith said the collapse of two US banks, Signature and Silicon Valley Bank, has little impact on Thailand as there were no transactions nor investments in them, Matichon newspaper said today (Mar. 13).

US regulators closed New York-based Signature Bank on Sunday, the third largest failure in US banking history, two days after authorities shuttered Silicon Valley Bank in a collapse that stranded billions in deposits, a Reuters report published by Yahoo!finance said.

The Federal Deposit Insurance Corporation (FDIC) took control of Signature, which had $110.36 billion in assets and $88.59 in deposits at the end of last year, according to New York state’s Department of Financial Services.

All of the depositors of Signature Bank and Silicon Valley Bank will be made whole, and “no losses will be borne by the taxpayer,” the US Treasury Department and other bank regulators said in a joint statement.

Signature’s failure followed Silicon Valley Bank’s Friday shutdown, the second largest in US history behind Washington Mutual, which collapsed during the 2008 financial crisis.

In Thailand, Arkhom said that the Finance Ministry is closely following the collapse of the two banks and is waiting to hear from the Bank of Thailand about the development.

“The Bank of Thailand is the one that monitors this matter. This sort of closure occurred here during the Thai crisis but this time it’s in the US and it’s bigger.

“We understand that it’s about a lack of liquidity by Signature Bank and SVB and the US authorities took the right step as the principle is to not burden the people,” he said.

Regarding concern about whether the collapse of the two banks would trigger an economic crisis, Arkhom said Thailand did not have transactions with the two banks. Thai funds such as the Government Pension Fund  also did not invest in these two bank’s portfolios.

Even so, there is an impact on the stock market in terms of investors panicking with stocks plunging all of last week and when confidence is hit investment risk rises accordingly.

Aside from the US Federal Reserve raising interest rates, the market is also watching the stability of US financial institutions.

“In Thailand, as far as the impact on the stock market is concerned, it’s in terms of feelings and investor confidence only. If the US has a clear approach to taking care of these issues, the stocks will bounce back.

“Regarding other issues I would have to discuss with the Bank of Thailand which is monitoring whether there is any impact on Thai financial institutions or not, ” Arkhom said.

He added that he did not see the need to set up a joint committee with monitoring by the Central Bank being adequate.


Top: A worker arrives at the Signature Bank headquarters in New York City on March 12, 2023. Photo: Reuters/Eduardo Munoz and published by CNA

Insert:  A customer stands outside of a shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California, Silicon Valley. Photo: Justin Sullivan/Getty Images and published by Yahoo!finance

Front Page: The main entrance of Silicon Valley Bank is pictured in Menlo Park, California, US on March 10, 2023. Photo: Reuters/Michaela Vatcheva and published by CNA

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TNR staff

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