Former European Central Bank (ECB) President Jean-Claude Trichet says he was unsurprised by the collapse of Credit Suisse and has called for the European Union to be hyper vigilant in the face of a "fragile" financial world.
In March, Swiss banking giant UBS bought the country's second largest bank, Credit Suisse, for $3.25 billion following a government orchestrated buy-out that saved the struggling bank from collapse as it wilted following problems with regional U.S. banks.
On Monday it was revealed that 61 billion Swiss francs ($68 billion) left Credit Suisse in the first quarter of the year, shedding light on the scale of the bank run that caused the 167-year-old institution to crumble and forced its state-engineered rescue.
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The UBS deal averted a collapse that could have triggered a wider financial crisis. But, while Trichet believes Europe's other major banks are in a stable position, he's warned the EU that it must be careful in the months ahead.
In March, Swiss banking giant UBS bought Credit Suisse for $3.25 billion to save the country's second largest bank from collapse./Reuters/Pierre Albouy
"I am not expecting too many problems coming from the banks themselves after what we have observed, and certainly not in Europe, in my opinion," he told CGTN. "But, in the European Union, of course, we are living in a financial world which remains fragile in some respect, and we have to be very vigilant, very, very careful and full of attention to what might come."
The buyout of Credit Suisse caught many financial observes by surprise, but Trichet says it was the most vulnerable of Europe's most powerful financial institutions.
"In the case of Credit Suisse, we are in a totally different universe because it was a big bank, but the weakest of the big banks all over the world," he explained. "And not surprisingly, when you had problems in the part of the banking system, namely the U.S. with the regional banks, then I would say the market was very, very keen on checking what was happening with Credit Suisse because again, it was the weakest."
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