European banking stocks slide on Credit Suisse worries

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European banking stocks slide on Credit Suisse worries via IrishTimesBiz

The Financial Times reported on Wednesday afternoon that Credit Suisse has asked the Swiss National Bank for a public show of support.

Irish banks have been among the biggest beneficiaries of rising European Central Bank rates, driven, to date, by the ECB’s shift since the middle of last year from charging banks negative rates for surplus deposits stored with it to paying them a rate of 2.5 per cent. The three Irish banks had €67 billion of surplus money stored with the central bank as of end of last year.

He noted that Irish banks have much higher levels of capital reserves, “sticky” household deposit bases, and stronger loan books, as a result of stricter lending policies and Central Bank mortgage rules brought in 2015, than they held at the time of the global financial crisis almost 15 years ago. Former ECB executive board member Lorenzo Bini Smaghi told German newspaper Boersen-Zeitung the bank should either delay or pare back the planned increase to avoid a policy error reminiscent of 2011, when it raised rates at the height of the euro zone debt crisis.

 

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