- Credit Suisse Chairman Axel Lehman said the contagion effect of Silicon Valley Bank’s recent collapse was local and contained.
- Lehman said Silicon Valley Bank and Silvergate were not subject to the strict enforcement that governs large banks in the United States and other parts of the world.
- However, the decline in banks still serves as a “warning signal” for the overall market climate, the chairman warned.
A logo of Swiss bank Credit Suisse is seen at a branch office in Zurich, Switzerland on November 3, 2021.
Arnd Wlegmann | Reuters
Credit Suisse Chairman Axel Lehman said on Wednesday that the contagion effect of the recent collapse of Silicon Valley banks was local and contained.
Lenders Silicon Valley Bank and Silvergate are not subject to the tough enforcement that governs major banks in the U.S. and the rest of the world, Lehman told CNBC’s Hadley Gamble at a panel session in Riyadh.
“I look at what happened in Silicon Valley banking and then other mid-sized banks — they weren’t really as tightly regulated as they were in other parts of the world,” he said. Basel III A requirement that supports the operational structure of most banks.
“So in this case, I guess [the contagion] Somewhat local and contained,” he said.
However, the Silicon Valley bank’s decline still serves as a “warning signal” for the overall market climate, the chairman warned.
European markets fell sharply on Monday amid the fallout from the SVB crisis. On Friday, SVB was taken over by regulators a day earlier after withdrawing large sums of money after effectively making the bank operational. HSBC later agreed on Monday to buy the British arm of the troubled US tech startup-focused lender for £1. Concerns about contagion and increased regulation and some general profit-taking led European banks to post their worst day in more than a year on Monday.
Credit Suisse has seen some of the biggest swings in the period, falling another 9% on Wednesday morning. The Swiss lender revealed on Tuesday that it had identified “certain material weaknesses” in its internal control over financial reporting for 2021 and 2022. It also confirmed its 2022 results, reported on February 9, which posted a full-year net loss. 7.3 billion Swiss francs ($8 billion).
Asked if he would turn down any government aid in the future, Lehman replied: “That’s not the topic.” “We’re regulated, we have strong capital ratios, a very strong balance sheet. We’re all hands on deck. So it’s not a topic.”
The emphasis is on de-risking Credit Suisse’s balance sheet, he said.
Lehman said 2023 and 2024 are years to position the bank, focusing its global wealth management business on Asia, the Middle East and Latin America.
