Former head of Otkritie Zadornov assessed which European banks will face financial problems
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The former chairman of the board of Otkritie, Mikhail Zadornov, believes that, following the Swiss bank Credit Suisse, other large European credit organizations may also have financial problems. Among the banks that are at risk, Mr. Zadornov named the Italian Monte dei Paschi di Siena and the German Commerzbank.
Monte dei Paschi di Siena considered the oldest bank in the world. He began his work in the 15th century. After the global crisis of 2008, the credit institution regularly recorded losses. In 2022, the bank’s losses amounted to €205 million.
Commerzbank is the third bank in Germany, founded in 1870. Unlike Monte dei Paschi di Siena, last year Commerzbank showed a profit of €1.4 billion against €430 million a year earlier. However, to achieve such results, the bank had to close several branches and reduce staff.
Mikhail Zadornov in a column for RBC notes that the crisis of confidence of depositors and investors creates liquidity problems primarily for those financial market players who regularly show weak results or have an unbalanced asset structure and a tendency to one-time large losses.
According to the ex-chairman of Otkritie, within the next year, large European and American banks will decide on consolidation. However, these processes in Europe and the United States can take place in different ways. Consolidation, he said, will be supported by the US Treasury, the Federal Reserve System, the European Central Bank, as well as national banks of individual countries.
“There are almost 5 thousand banks in the USA. Now investors will run away from the regional ones. These players will be forced to merge or close, there will be consolidation. In Europe, it is needed even more than in the States, but there is another problem: unlike the United States, there is a single European market and a European regulator, but in reality banks are regulated by national laws,” writes Mr. Zadornov.
19 March Swiss National Bank announced about the merger of the two largest banks in the country – UBS and Credit Suisse due to years of financial problems. Credit Suisse ended 2022 with a loss of $7.9 billion, which was the bank’s worst result since 2008. The situation for the Swiss bank worsened after the bankruptcy of the American Silicon Valley Bank and the closure of Signature Bank.
Read more about the situation in the banking sector – in the publication “Kommersant” “Away from American Banks”.
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