China's C.bank Warns SVB Failure Shows Impact of Rapid Global Rate Hikes

A security guard stands outside of the entrance of the Silicon Valley Bank headquarters in Santa Clara, California, US, March 13, 2023. REUTERS/Brittany Hosea-Small/File Photo
A security guard stands outside of the entrance of the Silicon Valley Bank headquarters in Santa Clara, California, US, March 13, 2023. REUTERS/Brittany Hosea-Small/File Photo
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China's C.bank Warns SVB Failure Shows Impact of Rapid Global Rate Hikes

A security guard stands outside of the entrance of the Silicon Valley Bank headquarters in Santa Clara, California, US, March 13, 2023. REUTERS/Brittany Hosea-Small/File Photo
A security guard stands outside of the entrance of the Silicon Valley Bank headquarters in Santa Clara, California, US, March 13, 2023. REUTERS/Brittany Hosea-Small/File Photo

A senior official at the People's Bank of China said on Saturday the collapse of Silicon Valley Bank (SVB) showed how rapid monetary policy shifts were having spillover effects, state-owned newspaper Shanghai Securities News reported.

Xuan Changneng, a deputy governor at the People's Bank of China told the Global Asset Management Forum in Beijing that some financial institutions had grown accustomed to running their balance sheets in an environment of low interest rate volatility and as such lacked sensitivity to short-term and large fluctuations in rates.

Silicon Valley Bank's balance sheet characteristics made it more sensitive to interest rates changes and ultimately led to risk, the newspaper cited him as saying.

"Based on the current situation, there is still uncertainty about whether inflation in the major developed economies will fall significantly in the short term, and continuing to maintain relatively high interest rates may also have an adverse impact on the steady operations of the banking and financial system," he said.

SVB Financial Group on Friday sought protection under Chapter 11 of the US bankruptcy code, days after its former unit Silicon Valley Bank was taken over by US regulators.



UK Economy Grows 0.5% in February, Official Figures Show

Commuters walk as the sun rises behind Tower Bridge and the Canary Wharf financial district, in London, Britain, April 11, 2025. REUTERS/Isabel Infantes
Commuters walk as the sun rises behind Tower Bridge and the Canary Wharf financial district, in London, Britain, April 11, 2025. REUTERS/Isabel Infantes
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UK Economy Grows 0.5% in February, Official Figures Show

Commuters walk as the sun rises behind Tower Bridge and the Canary Wharf financial district, in London, Britain, April 11, 2025. REUTERS/Isabel Infantes
Commuters walk as the sun rises behind Tower Bridge and the Canary Wharf financial district, in London, Britain, April 11, 2025. REUTERS/Isabel Infantes

Britain's economy grew at a monthly pace of 0.5% in February, figures from the Office for National Statistics showed on Friday, well above economists' expectations in a Reuters poll for an expansion of 0.1%.
Britain's economy grew by a lackluster 1.1% last year. Last month government budget forecasters halved their 2025 forecast to 1%, though they see stronger performance of 1.9% in 2026.
However, these forecasts have been thrown into doubt by President Donald Trump's announcement last week of sweeping tariffs on US imports. The tariffs raise the cost of most British exports to the United States by at least 10% and more than double the cost of imports from China.
Even before the tariff announcement, Britain and other European economies had slowed due to worries about US trade policy. British businesses also said they were reining in hiring and investment plans due to a big rise in employment taxes and the minimum wage that took effect this month.
However, there had been some signs that weak consumer spending had been starting to pick up as wage growth continued to outstrip inflation and retail sales beat economists' expectations in February.