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- Credit Suisse to buy UBS Group for USD 3.02 billion after the latter failed.
- Credit Suisse and other financial firms have been affected by the banking contagion
According to reports, banks have been requested to report and provide updates on transactions involving crypto assets by the Australian Prudential Regulation Authority.
The announcement is made in light of previous bank sector failures concerning Silicon Valley Bank (SVB) and Credit Suisse. After failing to raise USD 2.2 billion to cover a loss from the sale of assets, US government bonds were mainly impacted by increasing interest rates, wherein SVB failed to survive in the US.
These events led to a bank run in the US and raised investor concerns about the condition of the banking industry as a whole. In addition, on March 19, UBS Group and Credit Suisse reached an agreement for the latter to buy the former for USD 3.2 billion after the latter failed over the weekend.
Unprepared For Banking Contagion
The general public was unprepared for the banking contagion that started earlier this month. Three well-known financial firms fell like dominoes, victimizing the United States. Although Credit Suisse is in trouble, many people, including Citigroup, believe that European banks are secure and are unlikely to experience an SVB 2.0 scenario.
In fact, regulators worldwide have begun to describe the state of banks in their various areas. Australian banks are “unquestionably solid,” according to Assistant Governor of the Reserve Bank of Australia Chris Kent. The official continued by pointing out their strong capital and liquidity buffers. Banks, meanwhile, have reportedly been requested to disclose their exposure to crypto-focused projects and start-ups as a safeguard.
According to the Financial Review, the Australian Prudential Regulatory Authority reportedly instructed banks to “enhance their reporting around crypto assets and submit daily updates” to the organization, citing information from three unnamed individuals. This action has been taken to gain more knowledge about system vulnerabilities.
Relay Crypto Transactions
According to reports, banks have been requested to report on and provide updates on transactions involving crypto assets by the Australian Prudential Regulation Authority.
The announcement is made in light of previous bank sector failures, including Silicon Valley Bank (SVB) and Credit Suisse. After failing to raise USD 2.2 billion to cover a loss from the sale of assets, mostly US government bonds, that were impacted by increasing interest rates, SVB failed to survive in the US.
These events led to a bank run in the US and raised investor concerns about the condition of the banking industry as a whole. In addition, on March 19, UBS Group and Credit Suisse reached an agreement for the latter to buy the former for USD 3.2 billion after the latter failed over the weekend.
These new regulations in Australia are a part of the APRA’s expanded banking sector supervision. Cointelegraph.com reports that APRA has begun asking banks to disclose their exposures to start-ups and businesses engaged in the cryptocurrency industry.
To learn more about banking exposures to cryptocurrencies and related risks, they are also said to have compelled banks to give the APRA daily updates.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
