The head of the International Monetary Fund (IMF), Kristalina Georgieva, urged this Sunday to “remain vigilant” in the face of “heightened uncertainty” in the financial sector, comments that come after the recent turmoil with Western banks.
The bankruptcy of the California bank Silicon Valley Bank (SVB) on 10 March raised concerns about the soundness of the banking sector in the US and Europe.
The first European victim, Credit Suisse, was caught last Sunday by compatriot UBS for a fraction of its market value.
“It is clear that risks to financial stability have increased,” Kristalina Georgieva said today at the China Development Forum, an event organized by the Chinese government in Beijing.
The takeover of Credit Suisse by UBS, coordinated by the Swiss authorities, as well as the central bank’s recent moves to improve access to liquidity averted panic, but failed to bring stability to the markets.
“Policymakers have taken decisive action in response to risks to financial stability,” Georgieva said in her speech.
“These measures have eased market tensions to some extent, but uncertainty is high, underlining the need for continued vigilance.”
Bank shares on European stock exchanges fell further on Friday.
The recent reassuring statements by Christine Lagarde, President of the European Central Bank (ECB), reaffirming the resilience of the banking system, and those of French President, Emmanuel Macron, and German Chancellor, Olaf Scholz, succeeded unable to calm the spirits.
US President Joe Biden said in Ottawa, Canada, on Friday that the “banks were doing pretty well” and that he didn’t see anything “exploding.” However, he acknowledged that it “would take some time for things to settle down”.
Source: DN
