Even greater than the parallels are the differences to the financial crisis

The ongoing banking crisis is reminiscent of the great financial crisis that peaked in 2008. In order to assess the situation correctly, it is therefore important to note that although there are parallels, the differences are even more important. Ultimately, the saying is true: every crisis is different.

The most important difference: The starting point of the great financial crisis were billions in bad loans, mainly in the US real estate sector, which had received far too good credit ratings from the rating agencies and were scattered throughout the financial system due to extremely complex ownership structures. Nobody knew where the problems lay, there was a complete lack of transparency.

Quite different today: bad loans have not played a major role, at least so far. Rather, the starting point is losses that can be traced back relatively mechanically to shifts on the capital market: the rapidly rising interest rates, caused by the central banks’ fight against inflation, lead to price falls even for the safest bonds, because new, higher-interest securities replace the old, still low-interest bonds in the make the comparison unattractive.