Lloyds Bank's CEO, Charlie Nunn, stated that British banks have not yet witnessed a "flight to quality" among customers who are apprehensive about the safety of their deposits following the

collapse of Silicon Valley Bank (SVB) last week. Nunn spoke at a Morgan Stanley event on Tuesday, where he referred to the demise of the specialist lender and how it has caused widespread banking turmoil, along with a rout in global stocks.

However, Nunn said that the SVB's collapse was relatively idiosyncratic compared to the UK, and they have not witnessed a flight to quality. The banking turmoil caused by SVB's collapse has created fears of contagion in other lenders worldwide, and bank stocks in Asia and Europe have plummeted.

Meanwhile, major U.S. banks such as JPMorgan and Citigroup have experienced a surge of customers seeking to shift their accounts to larger lenders. But Nunn emphasized that the situation in the UK is different and that they need to see how it plays out.

The U.S. has taken emergency measures to provide banks that are vulnerable to a run on deposits with additional funding. However, President Joe Biden's assurances and other policymakers' assurances have done little to calm the markets.

Investors and analysts are predicting adjustments to global interest rate policies designed to control runaway inflation. Any further rate hikes are expected to weaken some bank balance sheets.

The collapse of SVB has created a lot of uncertainty in the banking sector, with investors and customers worrying about the safety of their deposits. However, Nunn's comments suggest that UK banks may not be as affected as those in the U.S. Nonetheless, the situation remains volatile, and policymakers will need to monitor the situation closely to avoid further market instability. Photo by Doyle of London, Wikimedia commons.