Lede

Economists and policymakers discuss the stability of the global banking system at the Ambrosetti Forum in Italy, with a focus on potential instability in financial markets.

Summary

• European banking system is in a strong position to weather stress due to the lessons learned after the financial crisis
• Concerns arise over potential instability in financial markets due to problems in the banking sector, particularly with tightening financial conditions
• The collapse of Silicon Valley Bank and several other regional lenders in early March sparks fears of contagion, furthered by the emergency rescue of Credit Suisse by Swiss rival UBS
• Both policymakers and regulators on both sides of the Atlantic have taken decisive action and pledged further support if needed
• Despite the progress made in Europe, there are still concerns about the US banking system and the potential for broader weakness
• Spanish Economy Minister Nadia Calviño notes that banks in Spain have stronger solvency and liquidity positions than many of their European peers, with no signs of stress in the Spanish market
• Central banks face a "two-front war" in combating high inflation and instability in the financial sector, according to Gene Frieda, executive vice president and global strategist at Pimco.