'Since 2008, governments and central banks have been trying to prop up the banks through a combination of socialism for the banks, and austerity for everyone else,' writes YanisVaroufakis. 'The result is what we see today.'
Every systemic banking crisis has a trigger that sets it off. In the case of SVB, the reason for its bankruptcy is twofold.
The plummeting in the share prices of Big Tech and of the entire digital ecosystem of small tech start-ups around Big Tech – a decline caused by the Fed’s termination of money printing.The first hit its funds, which were mainly invested in US treasuries. This happened as the rise in interest rates reduced the resale price of these bonds . In itself, this development was not sufficient to bankrupt SVB.
What could be done as an alternative? The exact opposite: austerity for the banks, with nationalisation of those who cannot survive. Today, Franco-German banks don’t seem to have the same problem – rather, they are being spared due to the antiquated structure of the European economy. What do I mean? Franco-German banks have not lent large amounts to European Big Tech for the simple reason that– they still lend to car manufacturers and extraction companies. So, I don’t see a European SVB on the horizon.
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