As calm returns to markets hit by the March banking crash, it’s time to start thinking about how the authorities have reacted. IMF warned of a “dangerous combination of vulnerabilities” in markets. OUR Bank for International Settlements declares for the first time since World War II that central banks protrusion of the face inflation, which coincides with very high levels of debt that threaten financial stability. “The risks to the financial system don’t look as severe as they did in March, but that doesn’t mean the crisis is over,” said Carl Tannenbaum, chief economist at Northern Trust, who worked in the US Federal Reserve’s risk division. Fed) during the 2008 global financial crisis.

The continued increase in interest rates by central banks made it clear that the situation is manageable.

OUR fed And European Central Bank continued to raise interest rates in March as Silicon Valley Bank (SVB) the swiss fell apart too Credit Suisse (CS) forced to merge with UBS. “If they didn’t increase the cost of borrowing, people would have the opportunity to despair and say that the situation is even worse than we thought,” said Dario Perkins, managing director of global macroeconomics at TS Lombard. Adviser to the British Treasury. “Low and stable inflation is good for the markets and the economy, so central banks need to be serious about how they handle it,” Tanenbaum added.

Federal Reserve Bank USA it met just twelve days after the dissolution of the SVB, and the ECB meeting on 16 March took place two days before the Credit Suisse bailout. Shares of US regional banks fell 36% in March. Central banks eased interest rate hikes in a message that took into account volatility risks, showing encouraging “humility,” Dario Perkins said. Of course, not all communication was good. The Swiss bank said March 15 that Credit Suisse had met its capital and liquidity requirements.

“And just a few days later, Credit Suisse was dissolved “completely,” said Gael Cobbs, head of fundamental research at Swiss fund management group Unigestion. He added that the reversal underlined that central bankers could be at a disadvantage.