World’s best banker: BIS boss sees no risk of recession in Switzerland

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Agustin Carstens (65) relies heavily on the Swiss economy. And he needs to know. As president of the Bank for International Settlements (BIS), he is, so to speak, the best banker in the world.

Carstens said in an interview with Tammedia newspapers that the global economy is more resilient than expected. What is true for the world is even more true for Switzerland.

Therefore, in many countries, he thinks a drop in inflation is possible if the economy weakens only slightly – a “soft landing”. “And among them I would count Switzerland. The BIS boss said the country has a good chance of avoiding a recession.

Criticism of the business model of banks

Switzerland is also praised for preventing the uncontrolled collapse of a major bank. In the case of Credit Suisse (CS), Carstens gave good marks to the Swiss authorities. There was no negative impact on the Swiss and global economy following CS’ death.

The chief banker sees the fundamental problem of failing banks in their business model. “The responsibility rests with the owners and management.”

Editing is not a panacea

Agustin Carstens continues to insist on a careful examination of possible measures in the banking system. Regulation is important, but it cannot prevent accidents.

According to the BIS boss, the revised regulation should include the digitization of financial service providers. This meant that money could be withdrawn from banks faster than previously thought.

Don’t rush

“We must examine various options to strengthen liquidity in the banking system,” he said in an interview. Higher liquidity buffers may be an approach.

However, new regulations such as higher equity ratios should not be rushed. “First we need to understand exactly what it is.” The Basel Committee on Banking Supervision is working on this. Carstens promised a piece of advice in a few months. (SDA/koh)

Source :Blick