Economics professor Weder di Mauro visits the Bundesbank
In her presentation, Beatrice Weder di Mauro shed light on the situation of the Swiss big bank Credit Suisse in March 2023 and the challenges facing Swiss banking supervisors at that time – namely resolving the crisis surrounding Credit Suisse, preventing contagion effects and stabilising financial markets. Ms Weder di Mauro outlined her work as a member of an expert committee for the Swiss government and the various options for overcoming the crisis which the committee had discussed back then. Besides the takeover option, Ms Weder di Mauro said there was also debate about a possible recovery and resolution of Credit Suisse. Having set out the various options, Ms Weder di Mauro explained why Credit Suisse was ultimately taken over by UBS. She finished by saying that the Swiss supervisory authority needs to be strengthened so that it can intervene at an early stage and prevent crises.
Does social media amplify liquidity crises?
Following her presentation, Falko Fecht moderated a discussion between Beatrice Weder di Mauro, Bundesbank President Joachim Nagel and Karlheinz Walch, head of the Bundesbank’s Directorate General Banking and Financial Supervision, on how social media influences liquidity crises. Does social media amplify bank runs? Should central banks intervene in social media? The participants agreed that social media makes financial markets more complicated and increases the speed of bank runs. Central banks therefore need to monitor social media more closely, they said, in order to identify risk situations at an early stage and intervene if necessary. The panel also discussed whether market valuations of banks and their risks should be incorporated more into banking supervision and what other lessons banking supervisors had learned from the Credit Suisse case which they could use to tackle future crises.