Dawood Al Ghul, CEO of Capital Bank Group, said in an interview with Al-Arabiya that the current crisis is economic, not banking, and began with an injection of liquidity into the economy, which caused inflation to rise.
Al Ghul added that Credit Suisse Bank’s issue is different from that of US banks, given that Credit Suisse Bank’s issue is considered to be a regulatory issue in the first place and started in 2020, as a result of a rapid change in management and strategy. , and this problem is not related to the growth of interest and current conditions.
“While the problem of the two American banks is related to the rapid growth of the interest rate, although they have strong investments and assets, and therefore the crisis is not banking, but rather economic, caused by high interest rates,” Al Ghul said. .
For his part, Riyad Bank Chief Economist Nayef Al-Ghait said that there are fundamental differences between the financial crisis of 2008 and the current crisis, while the 2008 crisis was characterized by a lack of regulation, problem deposits and a lack of deposit insurance, which led to a mortgage crisis. as the crisis is focused on bonds due to higher interest rates.
Al-Ghaith added in an interview with Al Arabiya that the regulation rules are now much higher than the 2008 rules represented by the Basel rules, and while the causes of the current crisis can be identified, the 2008 crisis was complex and difficult.
Financial markets expert Muhammad Ali Yassin disagreed with the classification of the current crisis and called it a banking crisis, as banks should have benefited from the lessons of 2008 despite the economic downturn and high interest rates, and suggesting that US Treasury bonds are a safe investment.
He attributed this to the rapid rise in interest rates last year and the fact that banks maintain liquidity through the use of depositors’ deposits in long-term bonds and bonds held to maturity, fixing unrealized losses appearing in equity.
“This is not a problem of the economy, but rather a problem of Treasury bond management,” Mohammed Ali Yassin said, pointing out that no bank in the world whose depositors agree to withdraw deposits will not be able to fulfill them.
Are global financial conditions still under control?
