G20 watchdog to study Silicon Valley Bank, Credit Suisse turmoil

The fallout from the collapse of Silicon Valley Bank, a U.S. bank that U.S. regulators did not deem to be “systemic” and therefore required to comply with more onerous liquidity rules, was felt in Europe.

In Switzerland, the government forced a takeover of ailing Credit Suisse by UBS, rather than closing it down using “resolution” tools regulators introduced after the 2008 global financial crisis.

Knot, who also heads the Dutch central bank, said the FSB has begun evaluating how the U.S. and Swiss authorities responded to these events.

Regulators should reconsider which type of banks are deemed to be systemically important and therefore come under global “Basel III” capital standards, Knot said.

“It’s not a European issue, but it is an issue in other parts of the world.” Knot told an event held by the European Banking Federation.

“Supervision on our side has clearly stood up better than on the other side of the Atlantic.”

It was also time to reconsider the liquidity coverage ratio, a buffer of cash and other liquid instruments banks are required to hold to cope with short term funding squeezes, Knot said.