The latest turmoil in the global banking sector has the potential to trigger a financial crisis, though it is too early to predict if it could lead to a repeat of 2008, warned Shayne Elliott, CEO of Australia and New Zealand Banking Group (ANZ).
In an interview in the bank’s website, he said that the authorities around the world are on high alert for the fallout from recent turmoil at banks following the collapse of Silicon Valley Bank (SVB) and Signature Bank in the US and the emergency takeover of Credit Suisse.
He also said that it’s a crisis for some obviously and it has the potential to be a financial crisis.
However, he said that it was premature to assume the current condition could result in “another global financial crisis” like 2008 that plunged the world’s major advanced economies into their worst recession.
Australian banks did not suffer as much as those in the US and Britain during the 2008 crisis due to tighter lending standards and a more resilient home economy.
Australia’s banking regulator, soon after the collapse of startup-focused lender SVB, said it had intensified supervision of the local banking industry and sought more information on the potential impact.
Global regulators have acted much quicker to support banks this time, having learned lessons from the prior crises, Elliott said.