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Sarkozy To Meet With Merkel On Thursday Regarding Failed Bonds

Sarkozy intends to pressure Merkel to allow the European Central Bank to rescue the euro zone.

(Reuters) - French President Nicolas Sarkozy will press German Chancellor Angela Merkel on Thursday to let the European Central Bank act decisively to rescue the euro zone from a deepening sovereign debt crisis now hitting Germany.

French officials hope Berlin will relent in its opposition to a greater crisis-fighting role for the ECB after Germany itself suffered a failed bond auction on Wednesday, highlighting how investors are now shunning even Europe's safest haven.

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Economy

How SVB Is Different Than Lehman — And Not Different Enough

The fall of Silicon Valley Bank revives memories of Lehman Brothers' bankruptcy. The two situations have some fundamental differences, but there is enough in common that the risks that SVB could spark a new global financial crisis is very real.

Photo of a person in front of a Silicon Valley Bank

A Silicon Valley Bank (SVB) branch office in Pasadena, California

Jean-Marc Vittori

-Analysis-

PARIS — In finance, brands can be the omens of disaster. On Monday, April 2, 2007, New Century Financial collapsed. The fall of this "financial institution of the new century," which had failed to properly assess risks, was the true starting point of the great financial crisis that culminated 18 months later with the bankruptcy of Lehman Brothers.

On Friday, March 10, 2023, Silicon Valley Bank (SVB) was shut down by U.S. authorities following the largest bank run in history. Its clients wanted to withdraw $42 billion in a single day.

The closure of the Silicon Valley bank was a result of disastrous management, but also from its central role in a start-up ecosystem that's been weakened by a scarcity of money.

The key question is: Is this closure the starting point of a new crisis?

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