“Too big to fail and too big to be saved”. The high-profile economist Nouriel Roubini told Bloomberg news that if Credit Suisse were to collapse it could result in a “Lehman moment” – a reference to the collapse of the US investment bank Lehman Brothers in August 2007 at the start of the global financial crisis.Īs I pointed out in my Bloomberg TV interview this morning the Credit Suisse crisis is a “Lehman moment” for European and global markets. However, other leading financial figures warned that the instability brewing in the European banking sector could pose an even bigger threat to global market stability. “The regulatory response has so far been swift, and decisive actions have helped stave off contagion risks. “It’s too early to know how widespread the damage is,” Fink wrote. “Something else had to give as the fastest pace of rate hikes since the 1980s exposed cracks in the financial system,” he said.įink added it was not yet clear where new victims of the “asset-liability mismatches” that claimed SVB would be found. Such concerns were further fuelled on Wednesday when shares in Credit Suisse plunged to record lows after the troubled Swiss lender’s biggest investor ruled out providing it with more funding.įink described the situation as the “price of easy money” that was having to be paid after the Federal Reserve’s decision to start aggressively raising interest rates. The failures over the past week of not only the California-based bank but also fellow US lenders Signature and Silvergate have prompted jitters across global markets.
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