© Reuters. FILE PHOTO: Australia and New Zealand Banking Group Chief Executive Shayne Elliott speaks during a Reuters Newsmaker event in Sydney, Australia November 30, 2016. REUTERS/David Gray
By Renju Jose
SYDNEY (Reuters) – The chief executive of Australia and New Zealand Banking Group said on Monday the latest turmoil in the global banking system had the potential to trigger a financial crisis, although it was too early to predict that it could trigger one similar to the one in 2008. .
Authorities around the world are on high alert for the consequences of the recent turmoil in banks following the collapse of Silicon Valley Bank (SVB) and signature bank (NASDAQ:) in the US and the emergency acquisition of Credit Suisse.
“Obviously it’s a crisis for some, but is it a financial crisis, who knows? Does it have the potential to be? Yes, it has the potential to be,” CEO Shayne Elliott said in an interview on the bank’s website. .
But he said it was premature to assume that the current condition could result in “another GFC,” referring to the global financial crisis some 15 years ago that plunged the world’s major advanced economies into their worst recession since the Great Depression in the 1930s. .
Australian banks did not suffer as much as those in the US and Britain during the 2008 crisis, thanks in part to tougher credit standards and a more resilient domestic economy.
“This is a different topic. It really has to do with the global war on inflation and how central banks are raising rates very quickly to combat that, and that has victims,” said Elliott, the chief executive of the country’s No. 4 . lender, he said.
Australia’s banking regulator, shortly after the collapse of start-up-focused lender SVB, said it had stepped up supervision of the local banking industry and sought more information on the potential impact.
Global regulators have moved much faster to support banks this time around, having learned lessons from previous crises, Elliott said.
“Having said all of 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 They tend to roll over a long period of time.”
Rachel Slade, head of retail banking at National Australia Bank (OTC:) Ltd, the country’s second-biggest lender, told the Australian Financial Review on Monday that mortgage customers had started to show the first signs of stress after 10 consecutive increases. of rates, but there were still no spikes in the default values.
Treasurer Jim Chalmers has said Australia was in a good position to withstand some of the volatility because its banks were well capitalized and had strong liquidity.
