Focus report: Lessons from the banking problems in the US and Switzerland in 2023

News 22 huhtikuuta 2024

At the beginning of last year, some banks in the US and Switzerland encountered severe financial problems, which forced government authorities in both countries to intervene. In the Swedish National Debt Office’s Focus Report, the authors describe those events and the lessons that can be learned from them.

A number of foreign banks encountered major problems in the spring of 2023. These were three relatively small banks in the US – Silicon Valley Bank, Signature Bank, and First Republic Bank – and Credit Suisse, a globally systemically important bank headquartered in Switzerland. US and Swiss authorities were forced to intervene and manage the problems at these banks in order to prevent major disturbances to the financial system.

Although the causes and courses of events differed in several respects, in both countries the crisis management by the authorities relied to some extent on solutions that were not planned in advance. Nevertheless, these government agencies achieved their primary objective of preserving financial stability.

Most experts agree that the problems encountered are mainly attributable to insufficient supervision and requirements for the banks, as well as to business models that proved unsustainable in a high interest-rate environment. However, there is also cause to reflect on whether the banking crisis management regulations designed after the 2007–2008 global financial crisis are effective.

The Debt Office’s Focus Report Lessons from the banking problems in the US and Switzerland in 2023 is written by Mattias Fransson, Karolina Holmberg, and Markus Ribbing.

Focus report: Lessons from the banking problems in the US and Switzerland in 2023