Irish Examiner view: Consumer loses out
Credit Suisse was sold to UBS.
The fallout from the demise of the Silicon Valley Bank in California continues to rain down, but we now have the added chill of another troubled bank, Credit Suisse, being sold to UBS at the behest of the Swiss government.
The two situations are not identical. SVB was little known outside the US tech industry until it entered choppy financial waters a couple of weeks ago, but Credit Suisse is a well-known pillar of the global financial community.
For decades it was a emblematic of Switzerland’s long-established reputation for financial stability, though in recent years there have also been plenty of financial scandals implicating Credit Suisse also.
Observers have been swift to distinguish between these bank failures and the financial crash of 2008, but that does not mean the events do not have broader implications.
For instance, earlier this week the price of gold rose over ,000 per ounce for the first time in a year, which is seen as a classic sign of global hedging against potential economic problems.
There are also specific consequences for Irish retail banking customers. In recent years Ulster Bank and KBC have left the market, reducing customer options and general competitiveness in the sector.
Their clients had to switch banks, which was beneficial for the likes of Bank of Ireland and AIB, but a general trend towards consolidation in banking, as reported by this newspaper yesterday, isn’t good news for the customer.
The Irish banking environment has lost some of its competitive edge with those recent departures, and bank failures in other jurisdictions are unlikely to encourage other operators into our market. It’s the consumer who loses out in terms of competition and options.
