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Published On: Tue, Jun 30th, 2020

Three Risks For European Banks

Three Risks For European Banks

Tyler Durden

Tue, 06/30/2020 – 05:00

Authored by Daniel Lacalle,

The measures implemented by governments in the Eurozone have one common denominator: A massive increase in debt from governments and the private sector. Loans lead the stimulus packages from Germany to Spain. The objective is to give firms and families some leverage to pass the bad months of the confinement and allow the economy to recover strongly in the third and fourth quarter. This bet on a speedy recovery may put the troubled European banking sector in a difficult situation.

Banks in Europe are in much better shape than they were in 2008, but that does not mean they are strong and ready to take billions of higher risk loans. European banks have reduced their non-performing loans, but the figure is still large, at 3.3% of total assets according to the European Central Bank. Financial entities also face the next two years with poor net income margins due to negative rates and Read Full Article

Source: Zero Hedge via Feedburner

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