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European banks in the corona crisis

April 8, 2020
Region:
The banking industry in Europe is entering the corona recession with strong capital levels and ample liquidity, though still only moderate profitability. Revenues will come under substantial pressure this year, loan loss provisions will jump and net income will fall materially – many banks may well make losses. However, there is likewise massive support from the public sector, with governments propping up the real economy, central banks the financial markets and supervisors relaxing rules for banks. This should mitigate the hit. Nevertheless, the risks are profound and a prolonged shutdown could even trigger a renewed banking crisis. Enormous uncertainty regarding its depth and length notwithstanding, the current crisis may well turn out more severe than the macro-financial shock scenario underlying the latest European bank stress test. Its magnitude could possibly even exceed the financial crisis and the Great Recession. [more]

More documents contained in "Talking Point"

153 (145-153)
November 30, 2011
Region:
145
Migration can be an effective way of reducing geographical imbalances on the labour markets. Together with politicians and the larger society, companies have a key role to play in integrating migrant workers. It is also in the interest of companies to make good use of the international pool of qualified labor. With 20% of the population being either immigrants themselves (10%) or second-generation immigrants (another 10% according to the EU Commission) – both in Germany and France – the costs of not fully integrating this potential are high, both for business and society. [more]
July 11, 2011
147
State-led economic development, if successfully implemented, is appropriate during the early “catch up” phase of economic growth. However, as growth becomes more dependent on indigenous innovation and hence a dynamic private sector, a shift to more market-led rather than state-directed development becomes necessary. This also applies to the banking sector. Subject to proper regulation, banking systems that rely on private-sector banks and market-led credit allocation will eventually tend to generate superior economic outcomes. That said, we are unlikely to see a significant reduction in public-sector bank ownership in the BRIC countries anytime soon, nor, for that matter, a tangible increase in foreign ownership. [more]
November 25, 2010
Region:
148
The reasons for the current problems of some euro-area sovereigns on the capital markets differ from country to country. In the case of Greece, it was mainly a persistently unsound fiscal policy that led to a loss of confidence among investors, while in Ireland this was primarily due to a credit bubble which had inflated the size of the financial sector. [more]
February 12, 2010
149
Well aware that small farmers are key to world food security, agribusiness players are increasingly partnering with them. They are taking practical steps to secure farmers’ financial success in a sustainable way and integrate them into the global food supply chains... [more]
September 18, 2008
152
The new figures are out. German women still earned 24% less per hour than men in 2006. This unadjusted gender wage gap is a useful indicator and underlines the need for action – especially since it has not decreased significantly in recent years, in spite of women’s increasing education levels. However, this overall indicator has the limitations of all aggregated averages, in that it mixes aspects of a different nature. In particular, it is important to distinguish between potential discrimination (arising in the absence of equal pay for equal work) and “choices”, like career patterns, for instance. At the same time, the latter are only partly driven by preferences – which makes things even more complex. We see four major aspects of the gender wage gap, three pertaining to women at large, and one specific to mothers (and a few rare fathers)... [more]
June 25, 2008
Region:
153
European banks have become considerably more international over the past few years, in terms of both the structure of their revenues and of their shareholders. In this context particular emphasis has been placed on strengthening the European business outside the home market, with the home market share in total revenues falling as a result – at the 20 largest European banks e.g. by 4 percentage points since 2001 to less than half. By contrast, as much as one-quarter of total revenues came from the rest of Europe in 2007 (2001: 18%). [more]
7.5.2