The logo of Swiss bank Credit Suisse is seen at a branch in Zurich, Switzerland, November 3, 2021.
Arnd Wegmann | Reuters
Credit Suisse Chairman Axel Lehmann said on Wednesday that the contagion effect of recent Silicon Valley bank failures is localized and contained.
Troubled lenders Silicon Valley Bank and Silvergate are not subject to the same rigorous enforcement that governs big banks in the U.S. and the rest of the world, Lehman told CNBC’s Hadley Gamble at a panel meeting in Riyadh.
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“I’m concerned about what happened with Silicon Valley Bank and then other mid-sized banks — they’re not really as heavily regulated as the rest of the world,” he said, citing Basel III Underpins the requirements of most bank operating frameworks.
“So in this regard, I think [the contagion] It’s kind of localized and closed off,” he said.
However, the chairman warned that SVB’s impact remains a “warning sign” for the overall market climate.
Due to the impact of the SVB crisis, European markets closed sharply lower on Monday. On Friday, SVB was taken over by regulators after massive withdrawals the previous day had effectively caused a bank run. HSBC then agreed on Monday to buy the UK arm of the troubled US tech start-up bank for £1. Fears of contagion and increased regulation, as well as some widespread profit-taking, led to the worst day for European banks in more than a year on Monday.
Credit Suisse itself has seen some major volatility in the period, falling another 9% on Wednesday morning.Swiss bank revealed on tuesday It has determined that its internal controls over 2021 and 2022 financial reporting have “certain material deficiencies”.It also recently confirmed its 2022 results announced on 9 Februarywith a net loss of 7.3 billion Swiss francs ($8 billion) for the year.
Asked whether some form of government assistance would be ruled out in the future, Lehman replied: “That’s off topic.” “We’re regulated, we have strong capital ratios, a very strong balance sheet. We’re all on deck.” on. So that’s off topic.”
De-risking of Credit Suisse’s balance sheet is also ongoing, he added.
Lehmann said 2023 and 2024 will be years for the bank to stabilize, with a focus on global wealth management in Asia, the Middle East and Latin America.
