After the bankruptcy of the US Silicon Valley Bank, some had bleak memories of the start of the 2008 financial crisis. Chancellor Olaf Scholz, however, points to serious differences to the situation at the time.
BUndescancer Olaf Scholz (SPD) sees no new financial crisis looming in Germany and Europe after the bankruptcy of the Silicon Valley Bank and the turbulence surrounding Credit Suisse. “I don’t see the danger. The monetary system is no longer as fragile as it was before the financial crisis,” said the Chancellor “Handelsblatt” according to a report published on Thursday.
He therefore does not expect any consequences for German savers. “The deposits of German savers are safe,” said Scholz – repeating a sentence that the then Chancellor Angela Merkel (CDU) and the then Finance Minister Peer Steinbrück (SPD) said in a similar way at the height of the financial crisis in 2008.
“We live in a completely different time,” Scholz said, referring to comparisons with the 2008 financial crisis. Legislators and banking regulators have learned their lessons from the Lehman bankruptcy. Bank regulations are stricter than they were then. “And we see that those responsible in the USA, Great Britain and most recently in Switzerland acted quickly and decisively.”
After the bankruptcy of the Silicon Valley Bank last week, there was turbulence in the financial system. In addition, the price of the major Swiss bank Credit Suisse fell on the stock exchange on Wednesday, triggered by comments from a major investor from Saudi Arabia. The fact that the money house has secured loans of up to 50 billion Swiss francs via the Swiss central bank has calmed things down.
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