March 29, 2023 - 2 min read

Is a new Banking Crisis on the Way? - Our Speakers and Experts on the Topic

After the collapse of Silicon Valley Bank, the forced merger of Credit Suisse and UBS and the crash of Deutsche Bank shares, many investors are worried about their money. Many of our speakers have commented on the uncertainties in the banking sector in recent weeks.

Chris standing up holding his daughter Elva

For example, our speaker Marcel Fratzscher, President of the German Institute for Economic Research, says that the systemic risks in the financial system are much lower today than during the Lehman bankruptcy in September 2008. His biggest concern at the moment, he said, is that there will be a panic on the capital markets, as no one knows which banks could still get into trouble. Such a panic could lead to so-called self-fulfilling prophecies.

Meanwhile, the current ifo business climate index is on the rise and forecasts improved in all economic sectors surveyed. "Despite the turbulence at some international banks, the German economy is stabilizing," ifo President Clemens Fuest commented on the report. According to the ifo Index, the banking crisis is thus hardly burdening companies and business mood is better than expected.

Economist Hans-Werner Sinn was a guest on Sandra Maischberger on ARD, where he discussed whether Europe is facing the next banking crisis. He does not consider major defaults impossible, but not likely either. However, he does not find the size of Credit Suisse, which has merged with UBS, reassuring, but a conflagration will certainly be prevented, according to our speaker Hans-Werner Sinn.

According to Wolfgang Gerke, President of the Bavarian Finance Center, lessons have been learned from the financial crisis. The banks would have to show higher reserves of equity capital and would also have to demonstrate to the supervisory authorities how they are positioned in the event of a crisis. We would have a bump in the road here, but we don't have a second financial crisis," says our speaker Wolfgang Gerke.

In a recent commentary, ARD stock market expert Markus Gürne writes that UBS's rescue of Credit Suisse will create an even much bigger bank and thus new risks. The new giant of the European and also global banking scene is definitely standing on rocky feet, writes our speaker Markus Gürne in his commentary.

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