(Bloomberg) --

European Central Bank Governing Council member Pierre Wunsch said the probability of Credit Suisse Group AG going bankrupt is “very low,” and he sees neither a contagion risk for European banks nor another financial crisis.

“I cannot imagine that the Swiss authorities will not do anything in the event of a real problem,” Wunsch, who’s also the Belgian central bank chief, told L’Echo newspaper in an interview. “We obviously look at the direct exposure of our banks to Credit Suisse. If we look at the figures, it is limited.”

There’s no information suggesting that European banks are vulnerable, Wunsch said, adding that the rise in interest rates didn’t penalize them. Wunsch also said that Belgian banks are stronger than the average European bank. 

He said that now it comes down to trust, which is subjective and can be fragile, yet he doesn’t see the risk of contagion or instability. Belgian lenders are covered by deposits and also the positions they’ve taken in markets so even if they had to record losses on their assets at market value, they’d have enough capital, Wunsch added.

“Belgian banks have much more collateral than they need,” Wunsch said. “They have, most of the time, a strong base of deposits. They have a wide spectrum of assets giving access to ECB liquidity. Regarding solvency, the level of own funds is also quite high.”

Speaking about the ECB’s decision Thursday to raise deposit rates by 50 basis points, Wunsch said the move was based on inflation remaining too high and not seeing a structural problem in European banks.

“If we had made another decision, I think we would have contributed to the uncertainty because people would have worried,” he said, adding that it wasn’t clear to what extent rates will be increased in the future.

“It will be meeting by meeting. If we match the baseline scenario of our projections, we still have a long way to go,” he said. “We will have to see, in the coming days, what the impact of what is happening in the United States and with Credit Suisse will be. The base case is that the situation will stabilize and have no impact on the financial markets.”

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