Banks collapse in Europe and the US. Memories of the financial crisis of 2008 are awakened. Will the same mistakes be made again?
The banks are making the headlines again. It was only at the weekend that the ailing Credit Suisse was taken over by UBS under pressure from Swiss and international central banks. This was after several regional banks in the United States had gone bankrupt just days earlier. The international financial markets reacted nervously to the latest news on Monday. The financial crisis of 2008 is still in the bones of many people. There are some parallels to this, but there are also important differences.
Madlen Stottmeyer in the podcast “Press Play – What is important”:
The reasons
The most important difference lies in the causes. The starting point of the financial disaster of 2008 were billions in bad loans, mainly for American homeowners who were actually not really creditworthy due to their low income. In 2006, so-called subprime loans accounted for almost half of all new mortgages that had received far too good credit ratings from rating agencies. These high-risk loans have been packaged in extremely convoluted securities and scattered throughout the financial system. There was complete lack of transparency. At some point nobody knew what was in the papers anymore. That made the rounds, the prices collapsed.
Today, bad loans do not play a major role, at least so far. Unlike UBS in October 2008, Credit Suisse is not faltering because of unsaleable securities. Rather, a series of scandals and mismanagement were fatal to her. But concerns about the banking sector spilled over from the US, where three regional banks have now collapsed, to Europe. The Silicon Valley Bank (SVB) had not invested its money in high-risk investments, but in American government bonds that were considered safe. With these, however, they made significant losses. And here lies the source of all evil:
First, two medium-sized banks in the US collapsed and were nationalized, then investor mistrust hit a number of the country’s smaller and medium-sized financial institutions. A domino effect that has also arrived on the other side of the Atlantic.
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