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European banks: The truth is in the numbers – progress in 2015

March 17, 2016
Region:
Despite headwinds from slow economic growth, low interest rates and tighter regulation, European banks’ recovery continues. In 2015, banks’ core business with the private sector returned to growth, revenues rose and provisions for loan losses declined again. The sector has become more profitable and resilient. Challenges remain aplenty, but European banks are definitely heading in the right direction. [more]

More documents about "Banking and financial markets"

159 (109-120)
December 5, 2013
Region:
Analyst:
109
The findings of our study show that in both the periods before and after the Lehman collapse higher liquidity and lower risk aversion go hand in hand with lower yield spreads between federal bonds and Länder bonds. With regard to the influence of fundamental macroeconomic and fiscal variables on the yield spread there are, however, differences between the periods before and after the Lehman collapse. Up until the Lehman collapse neither the debt level nor the relative economic output had a significant impact on the size of the yield spread. Like in the European bond market, however, the economic output and the debt levels of the Länder have been major determinants of the yield spread since 2008 – despite (implicit) joint liability of the different levels of government. [more]
November 26, 2013
Region:
110
The EU Commission's stated aim of increasing the industrial sector's share of gross value added in the European Union to 20% by 2020 is extremely ambitious and, in our view, cannot be achieved in the foreseeable future. Nonetheless, it sends out the right political signal that Europe is to be strengthened as an industrial location. Rather than focusing on purely industry-specific measures, the attainment of this goal will ultimately require supportive conditions for companies – those from both the industrial and service sectors – to ensure that they can compete against non-European rivals. This in turn will necessitate investment in education, research and infrastructure as well as a benign investment climate, affordable energy prices and intelligent regulation. [more]
November 11, 2013
Analyst:
111
Among the agreed derivatives market reforms, the central clearing of OTC derivatives contracts has a pivotal role that changes the existing risk management and collateralisation practices tremendously. Nevertheless, to date, there is little empirical evidence on the impact of the new market infrastructure on CDS spreads. Controlling for a number of factors, our results indicate that the costs of central clearing seem to be passed on to end-users in the form of increased CDS spreads. [more]
October 31, 2013
Region:
112
Is the Single European Market a success story? 20 years after it was established the question can largely be answered in the affirmative. The high and in part too optimistic expectations have not all been fulfilled. Nevertheless, the Single Market has resulted in increased competition, higher exports and more foreign direct investment. Overall, positive effects on GDP can be confirmed, albeit not on the scale anticipated by some. Given the structural problems in the eurozone and Europe's long-term dwindling importance for the global economy the continuing development of the Single Market is one absolutely essential element if Europe wants to maintain its economic strength. [more]
September 26, 2013
113
Five years after the global financial crisis hit both the US and Europe, banks across the Atlantic are in very different shapes. US banks have returned to record profit levels, while their European peers are struggling to stay above the zero line at all. The differences are mainly driven by diverging trends in revenues, corporate lending growth and loan loss provisions all of which have developed much more favourably in America than in Europe. This may have been caused largely by three underlying factors: i) the better macroeconomic performance of the US, ii) European banks' less aggressive dealing with problematic legacy assets and their greater need to deleverage and shrink, and iii) differences in the institutional setup - in Europe at times triggering doubts over the very survival of the Monetary Union, in the US allowing the Fed to massively intervene in financial markets. As the US economic recovery gains strength and Europe emerges from the debt crisis and recession, banks face improvements on an operating level, with EU financial institutions likely to narrow but not close the gap to their US competitors. [more]
September 25, 2013
Region:
Analyst:
114
The economic and financial crisis in Europe has led to a dwindling of the options for funding infrastructure projects. While funding conditions have deteriorated, a huge amount of investment needs to be made in infrastructure. The Project Bond Initiative (PBI) developed by the European Commission and the EIB is an instrument that is intended to help free up the investment logjam. The primary objective of the PBI is to persuade private-sector institutional investors to fund infrastructure projects. [more]
September 12, 2013
Region:
Analyst:
115
In the current debate and the numerous initiatives surrounding the improvement of tax collection and cooperation on cross-border (investment) income it is vital to differentiate between two phenomena: one is the fight against (illegal) tax evasion (mainly on investment income) and the other is the legal, (often) so-called 'aggressive' tax planning via profit shifting. Efforts to establish the automatic exchange of information for tax purposes as the European and/or international standard are relatively advanced. 'Aggressive' tax planning, which enables the de facto tax exemption of profits, cannot be addressed by extending the scope of the exchange of information alone, however. [more]
September 4, 2013
Region:
116
The idea of Banking Union has a sound economic rationale and would, if it were implemented in a consistent fashion, substantially strengthen financial stability in Europe and in the euro area in particular. However, the design and implementation of the EU Banking Union and its constituent components suffer from two very fundamental contradictions. On the one hand, there is schizophrenic attitude of member states with regard to the necessary degree of supra-nationality to preserve a financially stable internal market for financial services. And on the other, there are the contrasting expectations and motives of member states with regard to Banking Union. Member states and other European law makers still have the chance to put Banking Union on a sound footing. The chance should not be wasted. [more]
September 3, 2013
Region:
117
We have lifted our forecast for 2013 GDP growth in Germany from 0.1% to 0.5%. This is not based on a more bullish assessment of H2's growth dynamics, though. Our call results instead from the growth surge due to one-off effects in Q2 (0.7% yoy) and from revisions to the 2012 performance as these produced a smaller statistical underhang and thus lead to a higher annual average for 2013. [more]
August 19, 2013
Region:
118
The prospects for an ambitious partnership agreement between the EU and the US are better than ever. An agreement would increase growth and employment in both regions. The greatest economic opportunities lie in improved cooperation in the regulation of markets for goods and services. Governments, parliaments and most interest groups on both sides are in a positive mood; the resistance to an agreement has thus far been limited to criticism of some details. The greatest political difficulties are likely to arise in the areas of agriculture and data protection. [more]
August 7, 2013
Analyst:
119
Derivatives markets form a major part of the regulatory reform agenda. While corner-stones of the reforms have been defined, some crucial issues such as the exact definition of standardised derivative contracts, the treatment of cross-border trades and CCP access to central bank liquidity are yet to be clarified. The decrease in volumes in derivatives markets can largely be explained by trade compression. Even though there is a notable shift from dealer to CCP trades for interest rate derivatives and a less remarkable shift for the credit derivatives, the actual capacity of the clearing market is much higher. Regulatory pressure to encourage standardisation seems to have created little impetus for greater standardisation to date and the use of exchange platforms seems to remain subdued. Even though collateral practices would become more expensive for all market participants, non-financial corporations as counterparties are more likely to be affected by collateralisation obligations in the future. A few CCPs dominate the market suggesting concentration issues. [more]
July 31, 2013
Region:
120
In this issue we look at two structural aspects of the German economy which provide speed limiters for GDP growth. The first is the interplay of foreign and domestic demand with implications for the current cyclical forecast. The second is the demographic implications for German labour supply which will be the biggest bottleneck for the economy’s long term growth potential. [more]
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