Banking crisis: “no risk” of contagion in France, claims the sector federation
After the supervisors of the European Central Bank, the president of the French Banking Federation, Philippe Brassac also wanted to be reassuring after the bankruptcy of SVB and the historic stock market crash of Credit Suisse. Even if the financial centers have ended in sharp fall Friday at the close (-1.43% in Paris) with in particular a 2.2% drop in Crédit Agricole, Philippe Brassac believes that the current turmoil in the banking sector is not likely to contaminate the sector in France.
“There is no risk because there is no no possible mechanism of contagion between the events we are seeing and the French banks,” said the banker, managing director of Crédit Agricole, on France Inter.
According to him, “French banks are very solid because of regulation” and “there is no mechanism, as there could be in the past, for propagation”. “Almost all French banks are subject to specific prudential rules” such as capital requirements, liquidity, interest rate risk management, listed the representative of French banks.
Concerns remain over Credit Suisse
Unlike in 2008, Europe and the United States reacted immediately to try to respond to these tensions. In addition, “since 2008, the big banks no longer have the ability to link up with each other through monetary loans as we did in the past,” added Philippe Brassac.
Elsewhere, to contain inflation, the European Central Bank (ECB) on Thursday raised rates again and called a surprise meeting to discuss vulnerabilities in the sector.
Nevertheless, concerns remain about Credit Suisse. It is considered one of 30 banks globally as being too big to fail. It could be taken over in whole or in part by the largest Swiss bank, UBS, this weekend, in order to stop the panic.