The CEO of Australia and New Zealand Banking Group (ANZ) stated that the most recent upheaval in the global banking system had the potential to lead to a financial crisis. They also said it is too soon to predict that it could bring one similar to that in 2008.
The recent turbulence at banks, which followed the failure of Silicon Valley Bank (SVB) and Signature Bank in the United States and the emergency takeover of Credit Suisse, has put authorities all over the world on high alert for its effects.
“It is a crisis for some obviously, but is it a financial crisis, who knows? Does it have the potential to be one? Yes, it does have the potential to be one,” ANZ CEO Shayne Elliott said in an interview on the bank’s website.
Shayne Elliott referred to the global financial crisis that occurred about 15 years ago and sent the world’s main industrialised countries into their deepest recession since the Great Depression in the 1930s when he stated it was premature to presume the current situation could lead to “another General Collateral Financing (GFC).”
He stated due to stricter lending criteria and a more resilient domestic economy, Australian banks did not experience as much hardship during the 2008 crisis as those in the United States and Great Britain.
Following the failure of startup-focused lender Silicon Valley Bank, Australia’s banking regulator said that it has increased bank monitoring in the country.
Having learnt from previous crises, Shayne Elliott argued that this time, international authorities have moved far more quickly to help banks.
“Having said all that, it’s clearly not over. I don’t think you can sit here and say, ‘Well, that’s all done, Silicon Valley Bank and Credit Suisse and, you know, life will go back to normal’. These things tend to roll through over a long period of time,” he said.