First there was information that the American bank Silicon Valley Bank went bankrupt. A few hours later, a much larger bank, Credit Suisse, is showing signs that things are not going well. Everyone wonders if another crisis is coming, and if so, they wonder if they should invest their money in a shelter. HotNews spoke to several former bank presidents who are no longer in executive positions and asked them what’s going on and what to do with the money.

We preferred to talk with former managers of some top banks, because the latest events in the banking market no longer apply to them, they are no longer involved in the system, but they know its intricacies well.

“It is normal that people ask questions, especially since during the last crisis they were told that everything was under control, but it turned out that it was not. Here’s the thing: Silicon Valley Bank is a classic example of bad management. The bank was simply poorly managed. He took short-term deposits and placed money on long-term ones, which turned out to be fatal. Here it must be said that the most dangerous thing for the bank is the negative mood of customers. It’s something that can’t be modeled, it’s unpredictable… And if everyone thinks that a bank might be in trouble and runs to get their money, that bank is really going to be in big trouble. In the case of Credit Suisse, it was known on the market that it had repeatedly gone through major scandals, that it did not have the best reputation, so it was not a big surprise when it turned out that it was in trouble,” the banker explained to HotNews

“It’s normal for people to react emotionally, but there’s no need to panic. It should be remembered that deposits up to 100,000 euros are guaranteed.”

He also said that it is normal for investors to react emotionally during such periods, but that these periods of volatility will end and things will return to normal.

As for Romanian depositors, the former executive said they should have no problem as deposits of up to €100,000 are guaranteed. But the most important thing to note is that our banks do not have the influence over Credit Suisse that they had over Silicon Valley Bank. “But emotional reactions have existed since the dawn of time and will always exist. It’s all about not acting in a panic, because we’re hurting our own holdings,” the quoted banker explained.

We are faced with two banks with different problems, but which at the same time have shown their vulnerability

The problem is not related to how interconnected banks around the world are, but with the possible spread of some fears among the population, customers, whether companies or private individuals, explained another former bank president. I have experienced crises in the past, which may have been treated superficially, although later they turned out to be very serious. But now it is not like that. We are now faced with two banks with different problems, but which at the same time have shown their vulnerability. These are two specific problems of the banking system, not a systemic problem. In the case of SVB, we are talking about a bank with a business model different from classic banks, and in the case of Credit Suisse, a bank that has been repeatedly fined for various violations, most often accusations of money laundering and violation of certain embargoes. There is no need to panic, explained the former manager.

“You know, there is a saying in the market: when one bank has problems, all banks have problems”

A third banker says there is currently no sign of panic in the local market. “On the stock exchanges, of course, there were also falls, but at the level of 2-3%, one cannot talk about a massacre, blood on the walls, a complete catastrophe. You know, there is a saying in the market: when one bank has problems, all banks have problems. And this is fully confirmed if you look at the major stock markets. And we get calls from clients to ask if they should change the currency they keep their deposits in, or even more directly, how reliable we are and how affected we are by what’s happening in the US and Switzerland. We have received emails asking our people if another crisis like the last one is coming and what we recommend they do with their money. We try to explain to them that we are very far from that. And there is no question of a crisis like in 2008-2009, explains the Romanian executive power.

Latest developments: The Swiss National Bank announced that it is ready to support Credit Suisse with liquidity

Credit Suisse plans to borrow up to 50 billion francs ($54 billion) from Switzerland’s central bank and buy about 3 billion francs of debt to boost liquidity and reassure investors, foreign media reported.

The Swiss National Bank said late on Wednesday that it was ready to give Credit Suisse cash support after shares in the troubled lender fell 30 percent.

The bank’s problems arose after the chairman of the National Bank of Saudi Arabia, Credit Suisse’s main shareholder, ruled out any further investment in the bank’s capital.

In a statement on Thursday, Credit Suisse said it had decided to “strengthen its liquidity” by borrowing funds from the Swiss central bank under a credit facility.

Chief Executive Ulrich Koerner said the moves “demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation.” Körner’s restructuring included the sale of part of Credit Suisse’s investment division and the elimination of thousands of jobs.

“My team and I are determined to move quickly towards a more cost-effective bank based on customer needs,” added Koerner, who was appointed chief executive last July.

The Credit Suisse case is a reminder to other European banks that they too hold bond portfolios whose value has been hurt by rising interest rates

The move is Credit Suisse’s latest attempt to restore investor confidence after a series of scandals and collapses that rocked the Swiss bank and sent its share price to record lows.

Shares in Credit Suisse fell 24.2% on Wednesday, valuing the bank below 7 billion francs. The bank’s shares have fallen by 39% this year, and by 85% over the past two years.

Credit Suisse’s fall on Wednesday weighed on shares of European and US banks reeling from the collapse of SVB, the biggest US bank failure since 2008.

Investors also say Credit Suisse’s problems are just a reminder to other European banks that they also hold large bond portfolios that have been hurt by rising interest rates.

On Wednesday, National Bank of Saudi Arabia President Ammar Alhudayri said “the answer is absolutely no” when asked if the NBS was willing to provide capital to Credit Suisse. The SNB bought a 10% stake in Credit Suisse last year.