Dhe federal government has tried to calm down after the takeover of the ailing major Swiss bank Credit Suisse, which was organized over the weekend. “In Europe, after the 2008/2009 financial crisis, we made a lot of good decisions that are now paying off,” Economics Minister Robert Habeck told FAZ.
“Today we are not in a systemic financial crisis, but we see individual banks in Switzerland and the USA having problems. I assume that the financial system can take it,” Habeck said. He considers the danger of a recession to be manageable. “I don’t see any threat to the German economy from the events at Credit Suisse and the Silicon Valley Bank.”
Lagarde: “Total Toolbox” available
Meanwhile, ECB President Christine Lagarde assured the European Parliament that the eurozone’s banking sector is “resilient” and has strong capital and liquidity positions. In any case, the “entire toolbox” of monetary policy is available in the event that the financial system needs liquidity support. She added: “We do not know how the tensions in the financial markets will develop further, but we have great confidence that our banking system is stable and well capitalized.”
Lagarde pointed out that the rules for the banking market – especially for the resolution of institutions – differed from those in Switzerland. “Switzerland does not set the standards in Europe.” However, she does not want to rule out that the financing conditions for the banks will become even more difficult. The ECB would have to react to this if necessary.
Bank stocks under pressure
The emergency rescue of the major Swiss bank Credit Suisse on Sunday evening sent the financial markets into an emotional roller coaster ride. The German leading index Dax was in the red for most of the day – albeit to a manageable extent: the Dax fell by more than 2 percent at its peak, but later turned positive. The focus was once again on the prices of banks and insurers. Shares in banks in Germany and other European countries fell as markets opened Monday morning. The share price of Deutsche Bank, which collapsed by almost 10 percent, was hit hard first. The Commerzbank share lost more than 7 percent in value.
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In the further course of the day, the prices were able to make up some ground again. On the other hand, there was absolutely no stopping the shares of Credit Suisse itself. They fell by almost 64 percent – and thus fell below the UBS takeover price. UBS, which according to the emergency plan is to take over the reeling Credit Suisse, fell by almost 9 percent in the morning, but later recorded a plus. There was a great deal of silence in the boardrooms of the major German banks on Monday. Nobody wanted to make an official statement about the new situation in Switzerland. “They’re all keeping a low profile now,” said banking circles.