Natwest's Davies on Systemic Risk, Stress Tests, Moral Hazard

The transcript discusses the differences between US and European banking systems, highlighting the impact of interest rates and quantitative easing. It addresses the Credit Suisse crisis and its limited effect on European banks, emphasizing their strong capitalization and liquidity. Regulatory differences are explored, noting the rigorous stress testing in Europe compared to the US. The role of central banks and deposit guarantees is examined, with concerns about moral hazard and market discipline. Finally, the transcript touches on interest rate policies and the potential risks of shadow banking.

What concerns does the speaker express regarding the change in interest rate policy?

In what ways does the speaker believe the European banking sector is currently strong?

What are the potential consequences of a significant rise in interest rates on the banking system?