Arkhom says SVB's failure unlikely to affect country
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Arkhom says SVB's failure unlikely to affect country

Arkhom: SVB collapse unlikely to affect Thailand.
Arkhom: SVB collapse unlikely to affect Thailand.

The Finance Ministry is closely monitoring the collapse of Silicon Valley Bank (SVB) to see if it has any impact on Thailand, says Finance Minister Arkhom Termpittayapaisith.

He added that he was also waiting for information from the Bank of Thailand on the matter.

Due to concern that the collapse could spread contagion worldwide, Mr Arkhom said Thailand did not have any transactions with SVB or the now-closed Signature Bank in the US, and that Thailand's Government Pension Fund does not invest in these two banks. Therefore, he believes the issue will not affect Thailand.

He said the central bank has reassured the public that the country's financial system remains strong and retains the confidence of investors.

Fiscal Policy Office director-general Pornchai Thiraveja said that according to the ministry's preliminary evaluation, the collapse of SVB in the US would not have a direct impact on Thailand. It would have a short-term effect on the US tech sector, but not on other sectors.

He added that the finance ministry and related agencies would continue to monitor the situation, and stood ready to take action to protect the country's financial stability.

Mr Pornchai said that Thailand was financially stable, had a strong deposit protection system, and was ready to deal with any volatility. He added that people should not panic or be concerned that problems in the US would affect Thai financial institutions.

Sarun Sutuntivorakoon, president of the Thai Venture Capital Association, said the collapse of Silicon Valley Bank would have no impact on Thailand's startup and investment sentiment as local startups had nothing to do with fundraising there.

According to Agence France-Presse, Friday's collapse of SVB, which specialised in venture-capital financing in the tech sector, came after a huge run on deposits left it unable to stay afloat.

That was in response to its announcement of a stock offering and sale of securities to raise much-needed cash. Its shares fell by 60% in New York on Thursday, and trading was suspended on Friday morning, before regulators said they had closed it down.

SVB is the largest US retail bank to have failed since the 2008 financial crisis.

Its problems had built up as the US Federal Reserve's year-long interest rate hikes meant securities it owned were selling for significantly less -- a problem that other banks could face.

On Sunday, New York regulators said they had closed another lender, Signature Bank.

The crisis forced the Fed, the Treasury Department and the Federal Deposit Insurance Corporation to pledge to fully protect all depositors and provide backup to any lenders struggling to find cash by offering easier terms on short-term loans.

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