China puts US on notice over banking crisis

ISTANBUL

China on Thursday asked the US to explain what steps Washington was taking to deal with the banking crisis in the country.

"We hope the US will increase transparency and provide clarity on the exact size of the risk, response measures and ways to minimize its spillover," Wang Wenbin, the spokesman of China's Foreign Ministry, told reporters in Beijing. "This is a responsibility and what’s expected of the US."

Silvergate Bank, Silicon Valley Bank (SVB), Signature Bank, and First Republic Bank have gone under within a couple of weeks, causing panic for Wall Street and investors, and especially depositors.

"The SVB’s collapse has sent shock waves throughout the global financial market," Wang said, according to the ministry.

"We urge the US to adopt a responsible macroeconomic policy, take credible steps to stabilize market expectations and investor confidence, and avoid radical policy shifts that may cause serious spillover effects and repeat the history of the 2008 financial crisis," Wang said.

US Federal Reserve Chair Jerome Powell said Wednesday that the banking issues in the US could undermine the whole system if they remain unchecked.

“In the past two weeks, serious difficulties at a small number of banks have emerged,” he said at a news conference in Washington, D.C. after the conclusion of the Fed's two-day monetary policy meeting.

“History has shown that isolated banking problems, if left unaddressed, can undermine confidence in healthy banks and threaten the ability of the banking system as a whole to play its vital role in supporting the savings and credit needs of households and businesses,” he said.