In banking, money moves fast and when depositors started to look for their money back from two banks – Silicon Valley Bank and Credit Suisse – they collapsed sending shock waves through the global financial sector.
It’s been a week of banking turmoil, but why did it happen; is there a risk of contagion to other banks; and why did these bank collapses come out of the blue when the last bank crash promised tight regulation and oversight?
And does Christine Lagarde’s promise that the ECB will supply funds to the euro zone banks if needed suggest other European banks are in trouble?
If banking is all about trust, why do the reassuring noises from the financial sector make us more worried?
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In the Credit Suisse rescue, the bondholders were burned – the language we are hearing now is a sore reminder of 2008 but as Irish Times economics columnist Cliff Taylor explains as he talks us through the events this week in the global banking world, we are in a very different place now.
“No two crises are the same,” says Taylor. “We are in a different place then we were in 2008 but we do face an international period of uncertainty… Banking crises are never pretty. It’s hard to see us being the centre of the story the way we were back in 2008.” Presenter: Bernice Harrison. Producer: Declan Conlon.
