ANZ’s Shayne Elliott said there will be casualties, as the attention of financial markets turns to Deutsche Bank’s prospects to outrun the banking crisis.
ANZ Bank chief executive Shayne Elliott described the instability playing out in the global financial system as a modern version of the savings and loan crisis that swept through the US banking sector in the 1980s, as financial markets turn their attention to“The GFC was fundamentally a crisis around the quality of assets and the loans that banks make, and that’s not what the risk is here. This is a different issue,” Mr Elliott said.
National Australia Bank business head Andrew Irvine separately warned that businesses are running up against the limits of their ability to pass through cost inflationMr Elliott warned that this time around, funding market challenges will drive the cost of capital higher, leading to less credit being available in the economy as banks focus more on liquidity and the market emphasises capital adequacy.
The inflation challenge is likely to weigh on the ability of central banks to deliver the same relief financial markets and households have grown accustomed to.
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