- April 11, 2023
- April 11, 2023
First, the Silicon Valley Bank collapsed in the USA. Then, a little later, Credit Suisse was in such financial distress that UBS took it over. And finally, other ailing banks in the United States had to give up or be rescued, just like SVB. The reasons for these bankruptcies are complex and go back a long way. The consequences of the staggering credit institutions cannot yet be seen in their entirety. What does seem clear is that the central banks’ turnaround on interest rates in the fight against inflation, which is still high, was one of the triggers for the current situation. Now, in America as in Europe, there is concern about a deep recession. The Federal Reserve and the European Central Bank have to perform a difficult balancing act in their respective monetary policies. Why are several banks on both sides of the Atlantic in trouble? Will we see a renaissance of the global financial crisis of 2008 and 2009, or were the reforms enacted then sufficient to make banks and markets resilient today? Could central banks be forced to change course and usher in the end of the interest rate turnaround? Where is there a need for further action and reform to sustainably stabilize and strengthen the financial world and the real economy? Podcast hosts Julia Friedlander, Atlantik-Brücke, and Stormy-Annika Mildner, Aspen Institute Germany, discuss these questions with Stefan Eich, Assistant Professor of Government at Georgetown University in Washington, D.C., and currently Richard B. Fisher Member in the School of Social Science at the Institute for Advanced Study (IAS) in Princeton, New Jersey.