African banks pick lessons from SVB collapse

The collapse of Silicon Valley Bank continues to send shockwaves through the global financial markets, sparking intense scrutiny of regulators and bank executives worldwide. The aftermath of the bank's failure has not only led to widespread discussion but has also prompted bankers, particularly from Africa, to reflect on key lessons that can be learned from this event, drawing parallels all the way back to the great depression. In an exclusive interview with CNBC Africa, seasoned banker Lawrence Kimathi shared his insights on the situation. Kimathi emphasized that he does not consider the issue to be systemic, pointing out that if it were, its impact would have been felt more widely in the U.S. banking sector. While acknowledging unique decisions that led to the bank's downfall, Kimathi cautioned that the repercussions might extend beyond U.S. borders, affecting the global banking community. He stressed the importance of vigilance in monitoring the situation moving forward. Amidst concerns about the bank's stability and the CBK's intervention, Kimathi reassured that the bank is managing its operations with the available resources, prioritizing customer needs above all else. However, he noted a significant increase in exchange rates due to the imbalance between dollar supply and demand, citing recent reports of the shilling reaching 145 against the dollar. Kimathi highlighted the necessity of addressing this disparity to stabilize exchange rates in the market. The ongoing repercussions of the Silicon Valley Bank collapse serve as a stark reminder of the fragility of the financial sector and the critical importance of proactive risk management.