Monday, 17 June 2024

Economists: No fear for European banking sector.. ‎‎“Uncertainty” lies in America!‎

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The main topic of the Ambrosetti Forum in Italy, which was held last Thursday and Friday, was to study the possibility of further instability in European financial markets, which could arise from problems in the banking sector, and what is Europe’s position on the banking safety map compared to the current banking crisis.

According to “CNBC”, many economists and policy makers in Europe say that Europe has learned its lesson after the global financial crisis in 2008, and is now in a strong position to bear more pressure on its banking system.

The collapse of America’s Silicon Valley Bank and many other regional lenders in early March raised fears of what is known as a financial “contagion”, which was reinforced by the emergency rescue of Credit Suisse by its Swiss rival, UBS.

“The most worrying factor is the uncertainty in the banking sector, not so much about Europe, because the performance of the central bank The European Union was excellent, and the European Commission too, and the eurozone economy is stable, sound and profitable as well, but what can happen to the banking sector in America will remain a mystery.

He added, “The lessons that the world learned previously, and Europe in particular, enabled the eurozone to enhance the “financial strength and stability” of its banking system, which makes a repeat of the 2008 financial crisis impossible.

Focusing on “lessons learned” in Europe is very important, said George Papaconstantinou, professor and dean of the European University Institute and former Greek finance minister, who also expressed concerns about the banking sector in the United States.

He added that developments in Silicon Valley and Credit Suisse are due to “failures in risk management,” and in the case of Silicon Valley specifically, due to “policy failures in the United States.”

Spanish Economy Minister Nadia Calvino also said on Friday that banks in Spain have stronger solvency and liquidity than many of their European counterparts.

She added, “We do not see any signs of tension in the Spanish market, other than the general volatility that we see in financial markets these days. The situation now is completely different from what it was in the period before the European debt crisis in 2012.”

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