British banks are not yet seeing a "flight to quality" in deposits among customers nervous about the safe-keeping of their money following the collapse of US lender Silicon Valley Bank last week, Lloyds chief executive Charlie Nunn said today.
"What's happened with SVB is relatively idiosyncratic compared to the UK," Nunn told a Morgan Stanley event.
He was referring to the demise of the specialist lender, which has triggered widespread banking turmoil and a rout in stocks globally.
Shockwaves from the collapse of Silicon Valley Bank further pounded most bank stocks across Asia and Europe today as worries about potential contagion to other lenders deepened.
Major US banks including JPMorgan and Citigroup have seen a wave of customers applying to shift their accounts to larger lenders, the Financial Times reported today.
"We haven't seen what we've seen in the US, which is the flight to quality," Nunn said. "But let's see how that plays out and we'll see how people feel over the next period of time."
The US has taken emergency measures to give banks vulnerable to a run on deposits special access to additional funding, but assurances from President Joe Biden and other policymakers have so far done little to calm markets.
Investors and analysts are now forecasting tweaks to global interest rate policies designed to bring runaway inflation under control, with any further rate hikes likely to weaken some bank balance sheets.
