Silicon Valley Bank was the 20th largest bank in the United States.8 Although the bank was large by Swedish standards – about 70 per cent of Swedbank’s size – it was small in the US market. I see the importance of small and medium-sized banks as a clear lesson from the crisis. As an authority with a financial stability mandate, we cannot ignore such banks. Even if the problems occur in relatively quiet periods, they can have unwanted spillover effects. When the problems became acute in Silicon Valley Bank, the concern spread quickly to other similar banks. The reason was probably that they had similar business models, risk profiles and so on. This led to a loss of confidence in these banks, too. The contagion risks became obvious. One lesson is that we should not only look at the size of individual banks, but also whether certain groups of banks are similar and thus exposed to similar risks. This means that even smaller banks as a group can become important for financial stability.9  8 In terms of total assets, see FDIC https://banks.data.fdic.gov/bankfind-suite/financialreporting. 9 The global standards only apply to larger internationally active banks. The regulations applicable to smaller do-  mestic banks vary from country to country. In the EU, by and large the same regulations apply to all banks, but this is not the case in the United States, for example.
So we would act as the point of contact on operational and liquidity issues which might affect participants. Meanwhile, the role of the FSA is naturally to monitor the health of the institutions which fall within its supervisory remit, and consequently any concerns or questions in this area will naturally be addressed to them. And the Treasury will ensure that Ministers are kept up to date so that government is able to act promptly. It also undertakes to ensure coherence between the financial sector and the operation of public sector continuity arrangements more generally. A current example of such co-operation between the three authorities and the private sector is the Taskforce, on Major Operational Disruptions, of which I am the Chair. The Taskforce was asked by Treasury Ministers to assess whether we need more statutory powers in this field, and it so what they should be. Our findings will be published in the next few weeks: so please watch this space! I thought in closing that you might also be interested in a few observations on several issues which confront us today. These range from very high level issues such as leverage, to much more specific questions such as complex financial instruments. So firstly, leverage. Leverage is not itself a threat to financial stability: indeed banking practice relies on leverage. But leverage can become a vulnerability once it ceases to be sustainable. And here we need to assess the global picture at several levels: not just that of the UK.