Concerns rate hikes are driving trust erosion in financial institutions

The banking turmoil in March caused by the collapse of Silicon Valley Bank, Signature Bank, and the sale of Credit Suisse to UBS has "rocked market confidence", the IMF said. Financial counsellor and director of the IMF's monetary and capital markets department Tobias Adrian said this demonstrates the heightened risks increased interest rates cause for banks and non-bank financial intermediaries. Although hikes have targeted inflationary spikes, he highlighted this type of intervention is "often followed by stress that exposes fault lines in the financial system". Adrian, however, ...