"Firstly, inflation has remained too high, for too long. Secondly, we don't see a structural problem with European banks," he said, although it needed to be seen what impact the events in the U.S. banking sector and around Credit Suisse would have in coming days. Banking stocks globally have been battered since Silicon Valley Bank collapsed and Credit Suisse was forced to tap $54 billion in central bank funding, raising questions about other weaknesses in the financial system. "We don't have any information indicating the European banks to be vulnerable," Wunsch said. "If you look at the Belgian banks, they are more solid than the average of European banks. That's why it is very hard to imagine a repeat of the financial crisis." He underlined it was crucial to distinguish between Europe and the U.S., where a softer application of capitalisation rules had enabled some regional banks to run up higher interest rate risks than they would have been allowed to in Europe. "We do neither see a risk of contagion nor a risk of instability if we look at the figures from a rational perspective," the central bank governor said.
Asked about the future of Credit Suisse, Wunsch said he only saw a "very low" likelihood that the bank might go bankrupt. "For one, according to the public figures its situation is not bad, in itself, and, secondly, the Swiss authorities would intervene if necessary as it is a bank of systemic importance," he said. (Reporting by Balasz Koranyi, Sabine Siebold; Editing by David Holmes, Kirsten Donovan)
