Arnd Wlegmann | Reuters
On Friday, SVB was taken over by regulators after massive withdrawals a day earlier effectively creating a bank run. HSBC agreed on Monday to buy the British arm of the troubled US tech startup-focused lender for £1 ($1.21).
Concerns of contagion and increased regulation and just some general profit-taking caused European banks to post their worst day in more than a year on Monday. The heavy selling continued on Wednesday with Credit Suisse itself falling over 24%.
“We cannot because we would go above 10%. It’s a regulatory issue,” Saudi National Bank Chairman Ammar Al Khudairy told Reuters Wednesday. However, he added that the SNB is happy with Credit Suisse’s transformation plan and suggested the bank was unlikely to need extra money.
When asked by CNBC’s Hadley Gamble at a panel session in Riyadh Wednesday if he would rule out some kind of government assistance in the future, Lehmann replied: “That’s not the topic.”
“We are regulated, we have strong capital ratios, very strong balance sheet. We are all hands on deck. So that’s not the topic whatsoever.”
Embattled lenders Silicon Valley Bank and Silvergate were not subject to strict enforcements that govern bigger banks in the US and other parts of the world, Lehmann also said at the panel session.
“I look to what has happened in Silicon Valley Bank, and subsequently other midsize banks — they are not really subject to stringent regulation, as you have in other parts of the world,” he said, citing the Basel III requirement that underpins most banks operating framework.
So in this regard, I think [the contagion] is somewhat local and contained,” he said.
However, Silicon Valley Bank’s fallout still serves as a “warning signal” for the overall market climate, the chairman cautioned.
The Swiss lender revealed on Tuesday that it had identified “certain material weaknesses” in its internal control over financial reporting for the years 2021 and 2022.
It also recently confirmed its 2022 results announced on Feb. 9, which recorded a full-year net loss of 7.3 billion Swiss francs ($8 billion).
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