Apia, 4 April 2023 (TDI): The global banking calamity has imposed heavy effects on two regional banks in the United States of America (USA), but Samoa endured unaltered by it.
The collapse of the Silicon Valley Bank and the Signature Bank last month sent shockwaves through the American financial markets and sparked worries about a potential new global banking crisis.
The Central Bank of Samoa (CBS) shared in a press release that Samoa’s banking system continues to be a well-capitalized state with an adequacy ratio of 32.6% and above the necessary minimum of 15%.
It continues to be highly liquid with a liquid asset ratio of 31.9%. The country’s official foreign exchange reserves are safely secure as having no links with any of failed banks.
At the moment, current financial instability in these foreign jurisdictions may only have an indirect impact on Samoa’s economy via foreign exchange rates, where variability is so minimal.
CBS observed that the current global banking crisis is causing concern among International markets and investors, and it has the potential to affect other financial organizations in both the USA and Europe.
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These developments, together with present global financial conditions, have contributed to fears of a global recession shortly.
In light of this, CBS maintains its vigilance, will continue to follow this situation globally, and will implement the necessary policy changes should any potential negative effects on our small, developing island nation emerge.
It has been observed that the present global banking crisis is still causing investors and markets to be on edge, and it may eventually have an impact on other financial institutions in both USA and Europe.
These changes, along with the present state of the world’s finances, have fueled worries that there will soon be a global recession.
However, this does not excuse being vigilant about the possible effects that these international events may have on the macroeconomic and financial stability of Samoa.
