Dutch Online News: Tomorrow D-day European banks

Saturday, July 30, 2016

Tomorrow D-day European banks – IEXProfs

Tomorrow is the European banking Authority announce which banks passed the stress test. And which not. The banking regulator has the 51 largest banks for the fifth time subjected to a stress test. The key, according to the EBA representative of the sector since the 51 banks from fifteen countries collectively hold 70% of the total banking assets in Europe.

Most of the concerns are natural to the Italian banks. There are there are a lot of trouble. According to Business Insider, Italian banks have borrowed heavily to small businesses that were poorly managed.

And for example, loans were issued only to companies that immediately wanted to buy the shares of the lending bank. Kind of you to do something for me and I for you system.

Bailout Italian banks

Italian banks are now 360 billion euros of bad loans on their balance sheets. How can this be solved? According to Joshua Anderson, managing director of PIMCO in London, there are three ways to save financial institutions in Italy. A bail-in, muddling through or a recapitalization with cheap money. Probably a rescue succeeds only with a combination of these options.

But investors might not need to go as far south for failing banks. Also at Deutsche Bank is not doing well. According to the IMF, Deutsche Bank, the biggest risk to the financial system in the world, riskier even than HSBC and Credit Suisse.

One of the reasons to point to DB for this is the enormous interdependence of the bank other financial institutions. And when the US central bank, the Fed, the Bank met for the second consecutive year, not by the stress test.

Editors of IEXProfs consists of several journalists. The information in this article is not intended to constitute professional investment advice or as a recommendation to make certain investments. It is possible that the editorial staff positions are in one or more of the funds. Click for an overview of their investments.