On Monday, Australia and New Zealand Banking Group’s (ANZ.AX) CEO warned the new global banking turbulence might cause a financial catastrophe, but it was too early to foresee one like 2008.
After the U.S. bank collapses of Silicon Valley Bank (SVB) and Signature Bank (SBNY.O) and Credit Suisse’s emergency takeover, authorities worldwide are on high alert for the impact.
“Is it a financial crisis? Its potential? That might be “The bank’s CEO Shayne Elliott remarked.
He said it was premature to predict “another GFC,” alluding to the global financial crisis 15 years ago that sent the world’s main industrialized countries into their worst recession since the Great Depression.
Tighter lending regulations and a stronger economy helped Australian banks weather the 2008 crisis better than their U.S. and British counterparts.
“Different issue. The worldwide fight on inflation and central banks’ rapid rate hikes have caused victims “The fourth-largest lender’s CEO, Elliott, said.
As startup-focused lender SVB collapsed, Australia’s banking regulator increased bank regulation.
Elliott said global authorities learned from past crises and supported banks faster this time.
“But, it’s not over. You can’t sit here and say, “Oh, Silicon Valley Bank and Credit Suisse are done, and life will return to normal.” Some things need time.”
On Monday, Rachel Slade, personal banking group executive at National Australia Bank Ltd. (NAB.AX), told the Australian Financial Review that mortgage clients had started displaying initial pressure symptoms following ten straight rate hikes. However, there were no default spikes yet.
Last week, the Reserve Bank of Australia called Australia’s banks “unquestionably solid,” Treasurer Jim Chalmers said they were properly capitalized to withstand some of the volatility.
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