Banking crisis could trigger global financial meltdown – CEO
The head of ANZ bank has said it is too early to forecast an end to the financial turmoil
The threats facing some banks in the US and Europe have the “potential” to trigger a global financial crisis, the CEO of Australia and New Zealand Banking Group (ANZ), Shayne Elliott, warned on Monday.
Governments around the world are highly concerned about the fallout, which has already shaken investor confidence in certain segments of the banking industry.
Elliott said it was premature to assume the current situation could result in “another GFC [global financial crisis]” like the one that sent the world economy into recession in 2008, but challenges being faced by US and European banking sectors could have a negative impact globally.
“We shouldn’t be surprised that things like this happen, it’s 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,” Elliott said.
Economists rate Australia’s banking sector as resistant to global volatility, as its banks are well-capitalized and have robust liquidity. At the same time, the country’s regulator has tightened control and monitoring of domestic lenders following the collapse of several US institutions and an emergency takeover of Credit Swiss.
Meanwhile, the ANZ CEO has warned Western financial institutions against wishful thinking about a quick recovery, saying 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 concluded.
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