European leaders appease: “The banking system is stable in Europe”
After the summit in Brussels, the heads of government of the euro countries have in any case expressed their confidence in the stability of the banking system. “The banking system is stable in Europe,” German Chancellor Olaf Scholz assured. “Deutsche Bank has thoroughly modernized its economic model and is profitable. There is nothing to worry about.”
Dutch Prime Minister Mark Rutte also put share prices into perspective. “It is inevitable that there will be some reactions in the market,” he referred to the bankruptcy of the US Silicon Valley Bank and the takeover of the floundering Crédit Suisse. However, “underlying” the European banking system is “very strong”, with buffers, capital and liquidity requirements and tight supervision. “That differs from the situation in America.”
According to Rutte, banking rules in the eurozone have already been tightened considerably since the financial crisis of 2008 and supervision is also stricter. “There has been criticism: weren’t we too strict? Let’s be glad we did.”
ECB President Christine Lagarde is also said to have emphasized at today’s summit that the ECB “has all the necessary tools” to support the eurozone’s financial system, if needed.
