The recent collapses of Silvergate Bank, Silicon Valley Bank, Signature Bank and the state-backed takeover of Credit Suisse have evoked a certain sense of déjà vu. While some wonder about the stability of EU financial markets and whether lessons have been learnt since 2008, German MEP Markus Ferber argues we should not jump to hasty conclusions.

First, the good news: the collapse of US banks and the takeover of Credit Suisse have not had any impact on Europe’s financial stability, at least for now.

This reflects the fact that the capital and liquidity situation of European banks has increased throughout the last couple of years. In comparison to several years ago, the European banking sector has become more robust and the European supervisory authorities are in a better state.

Even though the collapse of the US and Swiss banks may be attributed to individual factors, it is worthwhile examining which lessons we can draw from this crisis.

First, we need to mention the side effects of the extremely loose monetary policy of issuing banks in the last couple of years.

Both the US Federal Reserve and the European Central Bank have flooded the markets with cheap money throughout the last few years, contributing to the creation of bubbles in certain sectors. In the US, we now witnessed how high ratings of young tech start-ups further contributed to the collapse of the Silicon Valley Bank.

Second, the supervisory authorities of banks – especially in the US – have to face the question of whether they have looked at the right risks.

Over several years there were stress tests to ensure that banks are equipped to deal with scenarios of lower interest rate phases (“lower for longer”-scenario). No one seemed to be expecting the opposite scenario, a massive adaptation of the interest rates in the other direction in a very short amount of time, as we witnessed in the last couple of months. European supervisory authorities also need to take a closer look at whether they have appropriately taken these risks into consideration.

Third, we need to examine more closely how international standards for banking regulation are transposed in the US and the EU.

In the US, the rules of the Basel Committee on Banking Supervision are applied to only a handful of major banks. Even banks like the Silicon Valley Bank with total assets of almost $200 billion profit from generous exemptions as concerns liquidity management and equity capital requirements.

In Europe, even the smallest of banks are asked a lot more compared to what banks are asked in the US. European supervisory authorities would have noticed a similar development, like the case of the Silicon Valley Bank, much earlier. Calling for stricter banking regulation as a reaction to the situation, is, however, too simple of an answer.

The only possibilities of regulatory relief that apply to the smallest banks in Europe can be found in the disclosure and reporting obligations. Material exemptions from the liquidity and equity capital requirements do not exist in the EU – and that is a key difference from the situation in the US.

Fourth, the problem of the Silicon Valley Bank was not that it was gambling with high-risk investments. On the contrary, a portfolio of long-running government bonds caused high depreciation. Such government bonds are usually the safest asset class. The collapse of the Silicon Valley Bank shows, however, that given sub-optimal risk management, even bonds with an extremely low likelihood to default can lead to problems.

On top of that, government bonds receive privileged treatment in bank balance sheets, not requiring the supply of capital funds. In comparison to other stocks, this leads to a lack of a risk buffer. We thus need to more generally talk about privileging government bonds, because we have witnessed repeatedly that government bonds are not a risk-free investment.

This is even more so the case as long as state debt remains at a high level for many EU member states. This problem also needs to be tackled through ambitious reforms of European debt rules, which focus on better implementation of the rules instead of more flexibility.

Fifth, more voices are calling for the Commission’s planned crisis management and deposit insurance (CMDI) framework review to be even more ambitious, potentially even paving the way for a European Deposit Insurance Scheme (EDIS). It is correct that we need to eliminate incoherencies that existed in the crisis management of banks in the past. The Commission’s proposal should focus on exactly this aspect.

It would be a mistake, however, to exaggerate by changing the hierarchy of claims or questioning the functioning of a reliable system. This would certainly lead to new insecurities in the market, which we certainly cannot use right now.

Consequently, we should take a very close look at the developments in the US and Switzerland, draw careful conclusions and avoid falling into an unwarranted and excessive desire for action.