ECB’s Wunsch does not see repeat of 2008 financial crisis


Banking stocks globally have been battered since Silicon Valley Bank collapsed and Credit Suisse was forced to tap $54 billion in central bank funding, raising questions about other weaknesses in the financial system.

“We don’t have any information indicating the European banks to be vulnerable,” Wunsch, also governor of the Belgian central bank BNB, told Belgian news paper L’Echo in an interview published on Saturday.

“If you look at the Belgian banks, they are more solid than the average of European banks. That’s why it is very hard to imagine a repeat of the financial crisis”.

Wunsch said it was crucial to distinguish between Europe and the U.S., where a softer application of capitalisation rules had enabled some regional banks to run up higher interest rate risks than they would have been allowed to in Europe.

“It is important to make a distinction between Europe, where banks are subject to certain rules, and the U.S. – with Credit Suisse, in my opinion, being a case apart,” he noted.

“We do neither see a risk of contagion nor a risk of instability if we look at the figures from a rational perspective,” the central bank governor said.

Asked about the future of Credit Suisse, Wunsch said he only saw a “very low” likelihood that the bank might go bankrupt.

“For one, according to the public figures its situation is not bad, in itself, and, secondly, the Swiss authorities would intervene if necessary as it is a bank of systemic importance,” he said.


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