According to Alina Aldambergen, head of the Kazakhstan Stock Exchange (KASE), the collapse of several American banks has not affected the financial market in Kazakhstan, despite increased volatility of foreign currencies.
The official noted that those problems that have toppled American banks were traditional problems for banks when assets were financed by liabilities, which led to growing yields and an interest rate gap. Even though the collapse of several banks in the U.S. hasn’t affected the financial market in Kazakhstan, it caused higher volatility in the currency market, Aldambergen said.
«In Kazakhstan, we have a completely different situation, as the asset quality review has shown. The sector is stable with a high level of liquidity, the KASE head noted.
The uncertainty in the banking markets in the U.S. and Europe has caused not only high volatility in the currency markets but also increased the risk of recession and raised the value of many foreign banks’ shares. However, the financial market of the country hasn’t seen any problems, she highlighted.
After the collapse of several American banks, the National Bank of Kazakhstan reported “higher volatility and weakening of the national currency against USD, which was complicated by a decline in oil prices to $73 to 73 per barrel.» The regulator said that the banking crisis in the U.S. and Europe is local and may cause little or no impact on the financial market in Kazakhstan. The country’s banking system has enough liquidity.
Kazakhstani experts have also called for calm. They explained that the situation in the U.S. won’t repeat the crisis of 2008. At the time, the crisis was driven by the credit risks of borrowers. This time, the collapse of banks was caused by risks of liquidity when clients withdrew their money from those banks en masse. At the same time, the banking system of the country is much stronger than it was back in 2008 thanks to new rules and requirements introduced in response to that crisis.
The collapse of banks in the U.S.
In March, three American banks – Silicon Valley Bank, Signature Bank and Silvergate Bank – declared bankruptcy. This happened against the background of the Federal Reserve raising the base rate. The situation has become the biggest financial crisis since 2008. Moody’s Investors Service even changed its outlook for the US banking system from stable to negative.
In Switzerland, UBS has acquired Credit Suisse, which lost $8 billion in 2022, for $3.2 billion. The Swiss government was forced to provide the two banks with a liquidity guarantee of $110 million.