Closure of Silicon Valley Bank Will Not Directly Impact Indonesia

AFP/JUSTIN SULLIVAN

A worker (C) tells people that the Silicon Valley Bank (SVB) headquarters is closed on March 10, 2023 in Santa Clara, California. Silicon Valley Bank was shut down on Friday morning by California regulators and was put in control of the U.S. Federal Deposit Insurance Corporation. Prior to being shut down by regulators, shares of SVB were halted Friday morning after falling more than 60% in premarket trading following a 60% declined on Thursday when the bank sold off a portfolio of US Treasuries and $1.75 billion in shares to cover declining customer deposits.

JAKARTA, KOMPAS — The Financial Services Authority (OJK) has assessed that the closure of Silicon Valley Bank (SVB) by the United States’ Federal Deposit Insurance Corporation (FDIC) on 10 March will not have a direct impact on the Indonesian banking industry, which is in a strong and stable condition. However, the problem that has befallen SVB will make investors more careful in funding start-ups.

In a press statement on Monday (3/13/2023), Dian Ediana Rae, the OJK’s banking supervision head, said that the closure of SVB was expected to have no direct impact on Indonesian banks that did not have business ties, facility lines, or investments in SVB securities. Unlike SVB and US banking in general, banks in Indonesia did not provide credit or investments to start-ups and crypto.