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As happened in 2008 with the bursting of the real estate bubble, the recent collapse of Silicon Valley Bank has set off alarm bells in the financial sector about the fear of another major global economic crisis. To fully understand the possible consequences, it is important to know that this bank is the sixteenth largest lender in the United States and was an entity focused mainly on technology and science start-ups, to which it offered venture capital services and provided them with loans. And in this sense, there are also companies in the food sector that have been affected, such as some wineries and startups related to food.
Companies such as Omson, a company that sells packets of Asian sauces, have been reporting on their social networks about this issue, they already had all their capital in SVB and since Friday it was blocked. In Food & Wine they have commented on how they have been affected by this financial crisis, stating that this type of collapse also affects small business groups. On their Instagram account, they stated that they would get through this and thanked their customers for continuing to support their business in such difficult times. As such, they were adding a free gift to orders placed over the weekend.
Something similar has happened to Shelf Engine, a startup that helps supermarkets reduce food waste through artificial intelligence. In a report for NPR, its founder commented that for companies like his, which are in a more initial phase, it is more complicated to obtain loans from large banks and, therefore, with entities such as Silicon Valley it was easier to obtain them. Among other food companies that were clients of this bank was Beyond Meat, an artificial meat company.
In that sense, the wine sector also relied on SVB. In fact, since the mid-1990s, the bank has lent almost EUR 4 billion to customers in the wine industry, which accounted for 5% of its lending, according to Business Insider.
Can such a crisis come to Spain?
In this context, the main fear is that there will be a domino effect with respect to other banks, mainly US banks, causing liquidity problems as happened 15 years ago. However, as Janet Yellen, the US Treasury Secretary, commented, the banking system “remains strong” and the authorities are “very carefully” monitoring some institutions in case they have to intervene.
Translating this to Spain, many experts are closely analysing the possible consequences. For the time being, the first vice-president and minister for economic affairs, Nadia Calviño, stated that “they are closely following the news” from the US, pointing out that the Spanish banking system “has a reinforced framework for both supervision and regulation and a healthy situation”. We will closely monitor how this issue progresses and to what extent it affects industries such as the food industry.