Connect with us

Hi, what are you looking for?

Jewish Business News

Business

Israeli Government Attempts to Handle SVB Fallout

Israel’s Ministry of Finance, the Bank of Israel, and Israel’s Securities Authority and the Innovation Authority, have established a joint committee to determine what, if any, fallout will be felt in Israel as a result of the sudden collapse of Silicon Valley Bank (SVB) in what was described as the largest failure of a US bank since Washington Mutual in 2008. Major Israeli firms like Pagaya and Similarweb borrowed a great deal of money from SVB.

The committee will be headed by the Director General of the Ministry of Finance, Attorney Shlomi Heisler and will be in contact with the local high-tech industry, funds and financial institutions in Israel and the US for the purpose of receiving data and analyzing the possible impact on the Israeli economy and, as necessary, to formulate a response to the Israeli companies.

Please help us out :
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at office@jewishbusinessnews.com.
Thank you.

The Finance Ministry explained the move saying, “following the collapse of the bank in the United States and its possible impact on Israeli hi-tech companies, the Minister of Finance ordered the establishment of a dedicated team to monitor the issue.”

And the repercussions of SVB’s failure could be extreme for Israeli firms.

According to Calcalist, Israeli fintech company Pagaya holds a rolling credit line of $167.5 million that it received from Silicon Valley Bank last September, but Pagaya never realized the entire credit at its disposal. Digital intelligence company Similarweb has a $75 million line of credit from the bank. And Innovid, which develops digital advertising technologies, has a credit line of $50 million with SVB. Innovid said that it used $20 million as of the end of 2022.

The problem for any firms with such lines of credit is that now they will need to look elsewhere to borrow money. This will not be so easy considering the current state of the world’s financial markets. Also, the American government could begin to call in the loans already paid out to have the needed fund for reimbursement to SVB creditors and depositors.

In the U.S., depositors are insured by the Federal FDIC program for up to $250,000. Federal authorities pledged that all such deposits will be secured and small depositors will get all of their money back, while it is working on how to disperse the bank’s funds to larger depositors. Some Israeli companies have millions deposited in SVB. But investors who hold stock in the bank will lose a fortune.

Israel’s Minister of Finance, Bezalel Smotrich, said, “The collapse of the bank is a significant event for both the American economy and the Israeli economy. We promised to act so that the Israeli economy would be an island of stability and certainty in the stormy economic waters of the world, and with God’s help we will do so. The State of Israel will stand to the right of the high-tech industry the local and will help it overcome the crisis and continue the momentum of development and action.”

Newsletter



Advertisement

You May Also Like

World News

In the 15th Nov 2015 edition of Israel’s good news, the highlights include:   ·         A new Israeli treatment brings hope to relapsed leukemia...

Entertainment

The Movie The Professional is what made Natalie Portman a Lolita.

Travel

After two decades without a rating system in Israel, at the end of 2012 an international tender for hotel rating was published.  Invited to place bids...

VC, Investments

You may not become a millionaire, but there is a lot to learn from George Soros.

Copyright © 2021 Jewish Business News