Man Group Plc Chief Executive Officer Luke Ellis warned the banking crisis that has sent shockwaves through markets this month isn’t over and more lenders could fail.
(Bloomberg) — Man Group Plc Chief Executive Officer Luke Ellis warned the banking crisis that has sent shockwaves through markets this month isn’t over and more lenders could fail.
“We will have a significant number of more banks that will not exist 12 months to 24 months from now that exist today,” he said in an interview with Dani Burger at the Bloomberg Invest conference in London on Wednesday.
Ellis comments follow one of the wildest weeks in the recent history of finance which saw fears of a banking crisis emerge from the collapse of Silicon Valley Bank and quickly spread across continents. Three banks have collapsed and a fourth, Credit Suisse Group AG was forced to merge with rival UBS Group AG as regulators sought to avoid a broader financial collapse. Another, First Republic Bank, is wobbling.
The effects reverberated across markets with bank stocks, corporate debt, commodities and US Treasuries all seeing sudden moves that took many traders by surprise.
All times GMT.
Lombard Odier’s Keller Says Swiss Strengths Remain (9:45 a.m.)
Hubert Keller, Lombard Odier’s senior managing partner, said Switzerland’s strengths as a wealth management center will survive Credit Suisse’s collapse.
“Switzerland is the largest place for cross border wealth management in the world for a number of reasons that have not changed with Credit Suisse,” he said in an interview with Lizzy Burden, noting the Swiss lender’s problems stemmed from its investment bank rather than its wealth arm.
He said he expects other Swiss wealth managers will likely benefit from Credit Suisse’s failure, as rich clients look to spread their wealth across multiple firms.
“There is no doubt that there will be some changes with clients as a result of this situation,” Keller said. “There is going to be a diversification effect which indeed is likely to benefit the rest of the wealth management industry in Switzerland.”
Man Group’s Ellis Says Central Banks Decisions (9:30 a.m.)
As well as warning of about the possibility of more pain to come in the banking sector, Man Group CEO Ellis also said central bankers will “have to keep rates high enough to cause pain and that will break things” if they want to bring inflation under control. That would include a willingness to see unemployment increase.
Ellis also had little sympathy for those Credit Suisse bondholders wiped out in the recent takeover. “If you invest in a bond or you lend money to someone and you don’t read the document, you deserve whatever happens to you,” he said.
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