LONDON – Startup founders at FinovateEurope were initially worried about the deposits they had with tech bank Silicon Valley Bank, until the HSBC rescue emerged earlier this week, Stephan Paxmann, head of digitalization and innovation at nearly $300 billion Germany-based bank LBBW, told Bank Automation News Tuesday at the event in London.

“SVB was a specialized bank with good long-term tech firms on its books. But interest rates moved against them and it’s possible the crypto-winter adversely impacted values and loans too,” Paxmann said.

“In Germany, SVB only did credit lines — their German business wasn’t even a third of the small SVB UK business, never mind the large $290 billion U.S. business … So, it’s not a big deal for us,” he said.

Although the LBBW is not worried, the SVB collapse does bring about reputational fears about banks that can spread into the banking industry. For example, Deutsche Bank fell 16% Monday, he added.

“But I’m very confident our controls in Europe post-2008, after [Lehman Brothers], are very strong [thanks to a full implementation of the Basel III capital adequacy rules], Paxmann said. The fallout in Europe will be minimal, especially as President Biden has also made clear he is supporting the U.S. tech firms affected, and the smaller U.S. banks adversely impacted by SVB’s collapse, as contagion fears spread in America.”