When banks go bust: Four factors at play

Trust, confidence, contagion and systemic risk
Banks are in the news again. Two bank failures in the US, and the forced takeover of Credit Suisse by UBS in Switzerland, have triggered the worst turmoil in the banking sector since the 2008 financial crisis. There's talk of a lack of trust, of a collapse in confidence, of contagion and systemic risk. Jannie Rossouw, visiting professor at the Business School of the University of the Witwatersrand, explains why they're concepts worth understanding.
The whole principle of banking is built on trust. Clients deposit money with banks to receive interest and trust that their deposits will be repaid at maturity. Banks lend money to ...

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Namibian Sun 2024-04-18

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Premier League: Chelsea 6 vs 0 Everton LaLiga: Osasuna 0 vs 1 Valencia SerieA: Atalanta 2 vs 2 Hellas Verona | Fiorentina 1 vs 1 Genoa European Championships Qualifying: Southampton 3 vs 0 Preston North End English Championship: Southampton 3 vs 0 Preston North End Katima Mulilo: 18° | 34° Rundu: 19° | 34° Eenhana: 21° | 36° Oshakati: 23° | 35° Ruacana: 24° | 37° Tsumeb: 20° | 33° Otjiwarongo: 18° | 32° Omaruru: 18° | 34° Windhoek: 17° | 30° Gobabis: 17° | 31° Henties Bay: 15° | 21° Wind speed: 18km/h, Wind direction: S, Low tide: 06:51, High tide: 13:03, Low Tide: 18:49, High tide: 01:16 Swakopmund: 15° | 17° Wind speed: 17km/h, Wind direction: SW, Low tide: 06:49, High tide: 13:01, Low Tide: 18:47, High tide: 01:14 Walvis Bay: 16° | 24° Wind speed: 22km/h, Wind direction: SW, Low tide: 06:49, High tide: 13:00, Low Tide: 18:47, High tide: 01:13 Rehoboth: 17° | 32° Mariental: 18° | 33° Keetmanshoop: 19° | 33° Aranos: 18° | 32° Lüderitz: 15° | 29° Ariamsvlei: 19° | 33° Oranjemund: 13° | 23° Luanda: 26° | 29° Gaborone: 14° | 27° Lubumbashi: 16° | 24° Mbabane: 13° | 26° Maseru: 11° | 22° Antananarivo: 12° | 23° Lilongwe: 16° | 25° Maputo: 18° | 28° Windhoek: 17° | 30° Cape Town: 16° | 21° Durban: 18° | 26° Johannesburg: 13° | 24° Dar es Salaam: 23° | 30° Lusaka: 16° | 26° Harare: 14° | 28° Currency: GBP to NAD 23.63 | EUR to NAD 20.27 | CNY to NAD 2.63 | USD to NAD 19.01 | DZD to NAD 0.14 | AOA to NAD 0.02 | BWP to NAD 1.33 | EGP to NAD 0.38 | KES to NAD 0.14 | NGN to NAD 0.02 | ZMW to NAD 0.74 | ZWL to NAD 0.04 | BRL to NAD 3.62 | RUB to NAD 0.2 | INR to NAD 0.23 | USD to DZD 134.59 | USD to AOA 832.83 | USD to BWP 13.85 | USD to EGP 48.45 | USD to KES 131.98 | USD to NGN 1138.13 | USD to ZAR 19 | USD to ZMW 25.16 | USD to ZWL 321 | Stock Exchange: JSE All Share Index 72995.19 Down -0.01% | Namibian Stock Exchange (NSX) Overall Index 1521.3 Up +0.05% | Casablanca Stock Exchange (CSE) MASI 13384.83 Up +0.17% | Egyptian Exchange (EGX) 30 Index 29667.71 Up +0.91% | Botswana Stock Exchange (BSE) DCI Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 369.30/OZ DOWN -0.0057 | Copper US$ 4.32/lb UP +0.77% | Zinc US$ 2 823.50/T UP 0.09% | Brent Crude Oil US$ 87.67/BBP DOWN -0.0304 | Platinum US$ 939.31/OZ DOWN -0.0213 Sport results: Premier League: Chelsea 6 vs 0 Everton LaLiga: Osasuna 0 vs 1 Valencia SerieA: Atalanta 2 vs 2 Hellas Verona | Fiorentina 1 vs 1 Genoa European Championships Qualifying: Southampton 3 vs 0 Preston North End English Championship: Southampton 3 vs 0 Preston North End Weather: Katima Mulilo: 18° | 34° Rundu: 19° | 34° Eenhana: 21° | 36° Oshakati: 23° | 35° Ruacana: 24° | 37° Tsumeb: 20° | 33° Otjiwarongo: 18° | 32° Omaruru: 18° | 34° Windhoek: 17° | 30° Gobabis: 17° | 31° Henties Bay: 15° | 21° Wind speed: 18km/h, Wind direction: S, Low tide: 06:51, High tide: 13:03, Low Tide: 18:49, High tide: 01:16 Swakopmund: 15° | 17° Wind speed: 17km/h, Wind direction: SW, Low tide: 06:49, High tide: 13:01, Low Tide: 18:47, High tide: 01:14 Walvis Bay: 16° | 24° Wind speed: 22km/h, Wind direction: SW, Low tide: 06:49, High tide: 13:00, Low Tide: 18:47, High tide: 01:13 Rehoboth: 17° | 32° Mariental: 18° | 33° Keetmanshoop: 19° | 33° Aranos: 18° | 32° Lüderitz: 15° | 29° Ariamsvlei: 19° | 33° Oranjemund: 13° | 23° Luanda: 26° | 29° Gaborone: 14° | 27° Lubumbashi: 16° | 24° Mbabane: 13° | 26° Maseru: 11° | 22° Antananarivo: 12° | 23° Lilongwe: 16° | 25° Maputo: 18° | 28° Windhoek: 17° | 30° Cape Town: 16° | 21° Durban: 18° | 26° Johannesburg: 13° | 24° Dar es Salaam: 23° | 30° Lusaka: 16° | 26° Harare: 14° | 28° Economic Indicators: Currency: GBP to NAD 23.63 | EUR to NAD 20.27 | CNY to NAD 2.63 | USD to NAD 19.01 | DZD to NAD 0.14 | AOA to NAD 0.02 | BWP to NAD 1.33 | EGP to NAD 0.38 | KES to NAD 0.14 | NGN to NAD 0.02 | ZMW to NAD 0.74 | ZWL to NAD 0.04 | BRL to NAD 3.62 | RUB to NAD 0.2 | INR to NAD 0.23 | USD to DZD 134.59 | USD to AOA 832.83 | USD to BWP 13.85 | USD to EGP 48.45 | USD to KES 131.98 | USD to NGN 1138.13 | USD to ZAR 19 | USD to ZMW 25.16 | USD to ZWL 321 | Stock Exchange: JSE All Share Index 72995.19 Down -0.01% | Namibian Stock Exchange (NSX) Overall Index 1521.3 Up +0.05% | Casablanca Stock Exchange (CSE) MASI 13384.83 Up +0.17% | Egyptian Exchange (EGX) 30 Index 29667.71 Up +0.91% | Botswana Stock Exchange (BSE) DCI Same 0 | NSX: MTC 7.75 SAME | Anirep 8.99 SAME | Capricorn Investment group 17.34 SAME | FirstRand Namibia Ltd 49 DOWN 0.50% | Letshego Holdings (Namibia) Ltd 4.1 UP 2.50% | Namibia Asset Management Ltd 0.7 SAME | Namibia Breweries Ltd 31.49 UP 0.03% | Nictus Holdings - Nam 2.22 SAME | Oryx Properties Ltd 12.1 UP 1.70% | Paratus Namibia Holdings 11.99 SAME | SBN Holdings 8.45 SAME | Trustco Group Holdings Ltd 0.48 SAME | B2Gold Corporation 47.34 DOWN 1.50% | Local Index closed 677.62 UP 0.12% | Overall Index closed 1534.6 DOWN 0.05% | Osino Resources Corp 19.47 DOWN 2.41% | Commodities: Gold US$ 2 369.30/OZ DOWN -0.0057 | Copper US$ 4.32/lb UP +0.77% | Zinc US$ 2 823.50/T UP 0.09% | Brent Crude Oil US$ 87.67/BBP DOWN -0.0304 | Platinum US$ 939.31/OZ DOWN -0.0213