UK Treasury official sees no immediate concerns about UBS-Credit Suisse deal

WASHINGTON, March 28 (Reuters) – Britain’s No. 2 Treasury official said on Tuesday he had no immediate concerns about UBS’s execution of the bailout of Switzerland’s Credit Suisse but would closely monitor the deal, reiterating that UK banks are “very resilient”. .”

John Glen, Britain’s chief treasury secretary, told Reuters on a stopover in Washington that British banks have seen no deposit outflows in reaction to the failures of US regional lenders Silicon Valley Bank and Signature Bank.

Those collapses more than two weeks ago prompted many US depositors to transfer billions of dollars from smaller regional banks to larger US institutions for perceived safety.

“We have a very resilient banking sector. Since the (global financial) crisis 15 years ago, we’ve taken some pretty bold steps and they’ve left us in a pretty good state,” Glen said, adding that he has “great confidence” in banking regulation. from United Kingdom.

Glen declined to comment on the merits of UBS Group’s Swiss government-backed acquisition. (UBSG.S) from troubled rival Credits Suisse (CSGN.S)saying that it was a matter that a sovereign government saw as “necessary”.

“Regarding the Swiss authorities and what they have done, I have no immediate concerns, but obviously, we work closely with the regulators to see if there might be elements that we need to continue to monitor,” he said.

He said this view extends to any impact on the City of London, which has weathered a number of uncertainties in recent years, including Brexit.

Glen said the recent global banking turmoil will not affect so-called Edinburgh reforms which he helped put together last year when he was the city’s finance minister. The plan eases some capital requirements for smaller banks and includes other reforms to make London more competitive with New York and Amsterdam in financial services.

“The reliability and fundamental security of financial services in the UK is fundamentally a matter for our regulators who work with the Treasury,” he said, adding that they both have “confidence in the context they find in the UK.”

Pressures from rising interest rates will continue for the UK banking sector and property market, where many homeowners face higher mortgage payments due to the prevalence of adjustable-rate loans, it said.

“The best thing we can do as a government is work to bring inflation down,” he said, which would ease upward pressure on interest rates.

Reporting by David Lawder; Edited by Cynthia Osterman

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