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Israel says immediate liquidity risk averted after SVB collapse

REUTERS/Brittany Hosea-Small
A customer is escorted into the Silicon Valley Bank headquarters in Santa Clara, California, US, on March 13, 2023

A panel formed by Israel’s finance ministry to assess the fallout from the collapse of Silicon Valley Bank (SVB) has determined that the immediate liquidity risk has been averted.

The ministry in a statement cited a decision by US authorities to back accounts – even those uninsured – at the bank, which has been an important lender for Israeli technology companies.

In a meeting with Citi Bank executives on Tuesday, Israel’s finance minister Bezalel Smotrich discussed the impact of the SVB and Signature Bank collapses, among other economic issues, according to a statement released by the minister’s office.

“Israel’s economy is strong and relatively easy to manage in times of crisis,” Smotrich said.

He also addressed plans to overhaul Israel’s judiciary that has led to major protests, saying that “noise” over the reform will quiet down when the coalition reaches a deal that Israel’s “mainstream” will find acceptable.

“We will calm down the markets. We will calm down the economy. And I really think that investment in Israel today is one of the safest and most profitable investments,” Smotrich said, speaking in Hebrew, in a video of the meeting distributed by his office.

Smotrich was in the United States for Sunday’s Israel bonds conference.

His visit was met with protests from some Jewish Americans and an unnamed “high-level US government speaker” was dropped from the event’s program list following controversy caused by the far-right minister’s statement earlier this month that a Palestinian town be “erased”, which he later partially retracted.