“Towards a new financial crisis of 2008? I don’t think so”. Interview with the lawyer Maurizio Irrera
Professor Irrera, you are one of the leading Italian experts on business crises. Lawyer, university lecturer and author of key publications on this topic, board member of leading companies and banking foundations. We can say that you enjoy a 360-degree view of the state of health of the production system and the link between it and the banking system. Let’s start with the latter: in recent weeks first Silicon Valley Bank, then the bailout – and in some ways controversial – of Crédit Suisse: are we faced with a repetition of what happened in 2008 with the Lehmann crack?
“I don’t think so; these are for different causes, in the USA case the Silicon Valley Bank had invested the enormous mass of liquidity available (over 200 billion dollars!), for one part, in just one sector, that of innovative start-ups and in high tech, which entered a crisis in 2022 and, on the other hand, in the bond market of American public debt, a safe security which however offered a very low yield and which, as soon as inflation started, suffered significant losses We must also consider that only 3% of customers had deposits of less than 250,000 dollars which is the guaranteed threshold: in short, an atypical bank which, on the other hand, enjoys the expansion of the gap as many universal European banks have of interest rates, was heavily penalized by inflation”.
“Credit Suisse”, he continues, “is a different case: it is a bank that has had major problems in recent years, including alleged offenses, sanctions, money laundering and tax evasion, all accompanied by huge balance sheet losses; but it is a institution too big to fail and in fact a buyer was immediately found (UBS which will pay 3 billion francs) and the Swiss Central Bank will make available a swap line of over 100 billion francs. volatile in recent weeks, but it does not seem to me that the consequences of what happened in 2008 with the Lehmann crack are around the corner, even if there is certainly no shortage of financial speculation if what we read these days is true, i.e. that there are short sales of European bank securities for over 30 billion euros”.
If we look at the last three years, the detonators of a structural crisis have not been lacking: first the pandemic, then the rekindling of inflation in the last months of 2021 on which the effects of the war in Ukraine have been grafted – especially as regards the increase skyrocketing energy costs – finally, starting from the second half of 2022, the launch of restrictive monetary policies by the central banks to cool down an inflation that has not been seen at these levels for forty years. It could have been a deadly cocktail destined to overwhelm the real economy, yet – despite the difficulties – the corporate system has held up overall at the moment. Resilience or had the previous crisis already, so to speak, made a selection?
“The resilience of many companies is always accompanied by the natural selection of the weakest and most exposed ones. The cost of energy is decreasing rapidly and certainly European governments – more or less, in relation to the state of health of their country – have tried to support families and businesses; some effects will then be delayed: it is true that those who have not paid have seen their supplies cut, but those who were supposed to collect have not done so and now we are beginning to see the effects on the accounts of those trades energy”.
“Wars create uncertainties, but also great opportunities for “lawful” earnings, according to Trilussa’s verses “war is a big round of money that prepares resources for the thieves of the stock exchanges”. Ultimately, inflation is true which impoverishes fixed-income families, but benefits, for example, the repayment of public debt, as seen with the great success of the last one-year BOT auction”.
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