Central Banks
PBOC Warns SVB Failure Shows Hazard of Rapid Global Rate Hikes
- Deputy governor says low rates made institutions complacent
- He was speaking at asset management conference in Beijing
The People's Bank of China (PBOC) building in Beijing.
Source: Bloomberg
This article is for subscribers only.
The collapse of Silicon Valley Bank shows that rapid monetary policy shifts in developed economies are having hazardous effects on financial stability, an official with China’s central bank said Saturday, in its first official comment on the crisis.
Some institutions grew too used to buying assets in a low interest-rate environment and lacked the foresight to position for tightening cycles, Xuan Changneng, a deputy governor at the People’s Bank of China, said at the Global Asset Management Forum in Beijing. SVB’s balance sheet made it more vulnerable to such hikes and led to its failure, he said.