by Angeloni, Claessens, Senu, Steffen, Weder di Mauro: The events of March 2023 in the US and Switzerland showed, once again, that banking systems remain fragile.
The latest Geneva Report on the World Economy assesses whether reforms to date suffice to deal with a changing environment and ongoing structural changes, and what additional reforms may be necessary. While the specific causes of bank vulnerabilities differ between jurisdictions, many of the report’s lessons apply more generally.
The events of March 2023 in the US and Switzerland showed, once again, that banking systems remain fragile. The three US bank that failed were together close to the largest failure in history, and the failure of Credit Suisse, a global systemically important bank (G-SIB), was dramatic. The events themselves and their proximate causes are well-known and much reviewed (e.g. Federal Reserve Board 2023, BCBS 2023, FSB 2023, Expert Group on Banking Stability 2023, FINMA 2024, SNB 2024, Metrick 2024, Weder di Mauro 2024). The 27th Geneva Report on the World Economy (Angeloni et al. 2024) analyses the deeper weaknesses that led to the events and provides related policy insights. Complementing other analyses (such as Acharya et al. 2023, Group of Thirty 2024, and Acharya et al. 2024), the report assesses whether reforms to date suffice to deal with a changing environment and ongoing structural changes, and what additional reforms may be necessary, also given longer-term trends and the need to review issues holistically. While the specific causes of bank vulnerabilities differ between jurisdictions, many of the report’s lessons apply more generally.
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