Global markets react to Credit Suisse deal as fears hit bank stocks
The Swiss National Bank said it was "prepared to provide further liquidity" to Credit Suisse if needed, after shares in the lender crashed following reports that the U.S. Department of Justice was investigating the bank over its role in the 1MDB scandal.
We have more questions than answers after the banking crisis of the past week. Wall Street was shaken by the collapse of two American banks, and the loss in investor confidence at Credit Suisse.
Experts discussed how to understand the rapidly changing and confusing environment in which financial institutions are operating during CNN's primetime special, "Bank Bust: Inside The Collapse of SVB."
Christine Romans, CNN's chief business correspondent, says that this isn't a repeat 2008's global financial crisis. Banks aren't carrying any toxic assets.
Romans stated, "They are not allowed to anymore." Romans explained that they don't have that trash, that junk on balance sheets. They must have more capital, and big banks need to be subject to stress tests.
Romans pointed out that SVB, a smaller bank, doesn't have to face the same regulatory scrutiny like larger banks.
Romans stated that the verdict was out on the debate about whether certain banks, which were smaller, were allowed to participate in the... regulations. This may have made them more vulnerable.
A little context: The regulations that were passed after the Great Recession set stricter standards for the banking industry. Small and medium-sized banks, such as SVB, with assets less than $250 billion were exempted by some of the strict capital requirements for larger institutions and the obligation to pass tests to determine their resilience to financial stress each year.