PARIS, Sept 11 — From the collapse of Lehman Brothers in 2008 to this year’s fire sale of Credit Suisse, the landscape of the banking sector has changed profoundly following a...
PARIS, Sept 11 — From the collapse of Lehman Brothers in 2008 to this year’s fire sale of Credit Suisse, the landscape of the banking sector has changed profoundly following a wave of consolidation and tighter regulation.After Lehman Brothers crumbled, regulators in the United States and Europe tightened the regulatory framework on banks to ensure they are better prepared to handle crises.
Since then, Swiss experts have recommended stepping up financial buffers for such large institutions as they were insufficient in the case of Credit Suisse and an ad-hoc solution might not always be so easy to find.The collapse of Lehman Brothers also triggered a wave of consolidation in the banking sector.
The crisis, in short, cleaned house by killing off the most fragile players,” said Xavier Musca, who was the head of the French Treasury during the global financial crisis and now heads up Credit Agricole’s investment bank. David Benamou, chief investment officer at Axiom Alternative Investments, said US banks now dominate the global business banking sector as they “profited from certain regulatory differences to take parts of the European market”.The collapse of a number of US regional banks at the beginning of the year, which hastened the demise of Credit Suisse, revived concern about the stability of the sector.