Bank of England says UK banking sector is “safe and sound” amid Credit Suisse fallout
The Bank of England moved late on Sunday evening to reassure investors that British banks remain strong despite the global drama in the banking sector, including UBS’ rushed purchase of Credit Suisse.
The historic Zurich lender was pulled out of the fire by the Swiss government on Sunday ahead of a bankruptcy which would have had “unthinkable” consequences, the Swiss President said.
The Bank said it welcomed the moves of their Swiss counterparts over the weekend.
“We welcome the comprehensive set of actions set out by the Swiss authorities today in order to support financial stability,” said the Bank of England in a statement.
“We have been engaging closely with international counterparts throughout the preparations for today’s announcements and will continue to support their implementation. The UK banking system is well capitalised and funded, and remains safe and sound.”
Those comments echo that of HSBC chief Noel Quinn, who told the Sunday Times he thought the UK banking system was in a relatively strong position despite global turmoil.
“Do I think the UK has a banking crisis before it? No, definitely not,” he said.
“I think the UK is well capitalised, profitable, with strong liquidity and good regulation,” he said.
UK lenders have felt the pain over the past week with significant share price losses, however analysts do not appear concerned at the moment that any of them could be caught up in any kind of significant trouble.
Last night the Financial Conduct Authority also issued a statement regarding the Credit Suisse deal.
E”arlier today, the Swiss authorities announced a wide range of actions to support financial stability. The FCA has been in contact with its Swiss counterparts and other UK regulatory authorities in advance of today’s announcements,” it said.
“The FCA has indicated that it is minded to approve the actions announced today in relation to the entities which fall under its regulatory and supervisory remit. “