SVB bankruptcy cause of 'deep crisis' in tech industry: Netanyahu
Netanyahu said he plans to discuss the impact of the crisis with his finance and economy ministers and the central bank governor once he returns to the occupied territories.
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People look at signs posted outside of an entrance to Silicon Valley Bank in Santa Clara, Calif., Friday, March 10, 2023 (AP Photo/Jeff Chiu)
Israeli Prime Minister Benjamin Netanyahu said on Saturday that the collapse of Silicon Valley Bank, a major lender to tech startups and venture capital firms, has created a deep crisis in the technology industry.
"I am closely following the collapse of the American investment bank SVB, which is creating a deep crisis in the hi-tech world. I held talks from Rome with hi-tech officials in Israel, and upon my return to Israel I will discuss the extent of the crisis with the ministers of finance and economy and the governor of the Bank of "Israel"," he said on social media.
Netanyahu is currently in Rome for an official State-visit. He said he plans to discuss the impact of the crisis with his finance and economy ministers and the central bank governor once he returns to the occupied territories.
He further reassured Israeli clients of SVB, particularly tech firms, that the government will provide assistance to affected Israeli businesses.
America's 16th-largest bank, SVB, has seen 60% of its shares plunging on Friday, making it the second largest bank failure in US history following the great market collapse of 2008, prompting regulators to seize its assets and halt trade on its stocks in Nasdaq.
Read more: Europe bank shares sink on concerns over US sector, Deutsche down 10%
The impact on the tech industry has been so profound that it affected markets all across the US, the UK, and several others, including "Israel."
The California Department of Financial Protection and Innovation (CDFPI) and the Federal Deposit Insurance Corp (FDIC) relocated SVBs assets - worth nearly $175 billion - to a newly established institution - the Deposit Insurance Bank of Santa Clara - which will be responsible for paying out clients with insured deposits on Monday, while the remaining assets will be auctioned to pay other depositors.
The banking sector, which was already witnessing a tumble in its stocks this week, was hit hard by the news, sending its shares even lower on Friday.
Trying to assure markets, Cecilia Rouse, head of the White House Council of Economic Advisers, said the banking system currently is in a much better state than it was in 2008.
Californian Governor Gavin Newsom said on Saturday that the highest-level officials at the White House and the US Treasury were working with the regulator "to stabilize the situation as quickly as possible."
