Chest Pains; European Banks  

Oleh:

[s.n]

Jenis: Article from Bulletin/Magazine
Dalam koleksi: The Economist (http://search.proquest.com/) vol. 400 no. 8748 (Aug. 2011), page 55-56.
Topik: Banking Industry; Business Conditions; Economic Crisis; Sovereign Debt; Government Bonds

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Perpustakaan Pusat (Semanggi) Nomor Panggil: EE29.67 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Steep falls in stock prices this month have erased all the gains made over the past year. The hardest hit have been banks, with those in Europe getting the biggest clobbering. European bank shares have fallen by 25% this year, and have underperformed the wider markets and American bank stocks over the past two years (see chart 1). Banks in France are down by 33% since the start of 2011, those in Italy by 37%. Many banks now trade at a deep discount to the value of their assets. Such deep discounts present something of a mystery. They suggest that investors are either worried about the sustainability of banks' earnings as economies slow or that they do not trust the value that banks ascribe to their assets. A sign of investor scepticism is that the cost of insuring against banks defaulting on their debt has surged. The likeliest response of stressed banks will be to reduce lending.

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