The travails of Credit Suisse and others have stirred up bad memories for a public still scarred by the financial crisis
o one in the Treasury had expected March to be easy. Last Monday’s economics-heavy review of defence and foreign policy, and last Wednesday’s budget, meant that a tough week for its mandarins was already priced in. But none of them had expected to have to sell a bank for £1.
However, the rescue turned out to just be the “warmup act in some ways”, according to a senior Whitehall official. What followed was days of near-constant communication with the Bank of England in order to avoid a re-run of the 2008 banking crisis, as confidence faltered in Switzerland’s second-largest lender,“There was much more concern about Credit Suisse and the aftermath of Silicon Valley Bank’s collapse this week than the budget,” the official said.
Some high-profile voices have stoked fears that problems at the likes of SVB and Credit Suisse could spill over to the entire financial sector. Larry Fink – chief executive of BlackRock, the world’s largest asset manager – said on Wednesday that the collapse ofcould just be the start of a “slow rolling crisis” in the US financial system, with “more seizures and shutdowns coming”.
Finance ministers and central bankers are at pains to reassure markets and the wider public that while billions might have to be pumped into banks, this time things are different: we will not be plunged into another global financial crisis.and “your deposits will be there when you need them”. Janet Yellen, the US Treasury secretary and a former central banker, repeated that to Congress on Thursday.
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