Only the Proposed referendum on United Kingdom membership of the European Union, now the Italian banking crisis: An European shares back the fear, the shares of almost all European banks are in freefall. Threatens the next financial disaster? An analysis.
Since the Proposed referendum on United Kingdom membership of the European Union referendum European bank shares have one-third lost value. How can this be explained?
sustainably stabilize Despite countless measures still not succeeded, the European financial sector. . Why bank stocks are always strong fluctuations in phases – as last week – extend to drastic losses
But since 2008 has nevertheless done a lot: The capital rules have been tightened, there were several stress tests, the European Union Bank is in power …
Apparently it was not enough. Experts argue with a reason for the continuing malaise: While the United States fully inflated its banks after the disaster of 2008, capital, left it at the European governments in many cases by the mere provision of liquidity. Thus, the patient came to the breathing apparatus, but was not operated. The hope was that recover the banks with time by itself. But then came the euro crisis, which has emaciated downright many southern European banks. And it followed the interest rate crisis, which makes now to also make the banks in the North extreme.
But what does that have to do with the Proposed referendum on United Kingdom membership of the European Union?
First of all, the relationship is very abstract: The Proposed referendum on United Kingdom membership of the European Union provides for uncertainty. So, investors separate from the securities, which are perceived as particularly risky – ie bank stocks. Instead, the money will be invested in “safe havens”, as it is called in the jargon. These include federal bonds or gold.
Okay, this is the abstract context. And the concrete?
Banks could suffer in various ways under the Proposed referendum on United Kingdom membership of the European Union. Many economists believe that the European economy will grow weaker as a result of the referendum than imagined – perhaps because companies invest less or consume consumer less. now paralyzes the economy, then fall out more loans. This means higher losses for the banks. And: paralyzes the economy, then usually less shares are traded, issued less bonds. That means declining income for banks.
Correct downhill it went with the bank stocks still only as the beginning of July it was announced that the Italian bank Monte dei Paschi due at risk of default loans a violent rebuke collected by the ECB …
Right. The Proposed referendum on United Kingdom membership of the European Union alone would probably not causing these price falls – just as, conversely, the Monte dei Paschi-message could hardly have triggered without Proposed referendum on United Kingdom membership of the European Union such a riot. Really bad, it was because both came together. First, the realization that the problems of Italian banks are apparently more acute than thought. And secondly, the fear that now everything will be much worse by the Proposed referendum on United Kingdom membership of the European Union.
What is the Monte dei Paschi?
It is said that the ECB had the institute asked to shut down their portfolios of bad loans of about 47 billion euros to around 33 billion euros. The resulting potential losses are likely to have the effect that the bank needed fresh capital. Analysts at Morgan Stanley, for example, estimate the capital requirement on two to six billion euros.
… which is not so insane amount is now compared to the sums that in the bank bailouts it in 2008 and 2009 went …
That’s right. However, the problems of the Italian banking sector go far beyond the Monte dei Paschi. A total of dormant potential credit loss amounting to around 360 billion Euro in the balance sheets of Italian financial institutions – a doubling compared to 2011. Although the institutions have set up provisions to absorb potential losses. These reserves, however, cover According to analysts from only some of the risks.
Since when did one of them?
The problem known as such for a long time. The Principle of Hope, however, which applied in many European countries in terms of the banks, was in Italy in particular. Now you can see that the situation of the Italian financial institutions, however, not improved over the years, but has actually deteriorated.
Prime Minister Matteo Renzi wants the banks that are most affected, with State money stabilize. However, the EU Commission and the federal government defend itself against it. Why?
Because state aid under the new European rules which came earlier this year in force, are allowed only in exceptional cases. Not more taxpayers to step in, but the bondholders. That was one of the great lessons that learned from the financial crisis politics.
Why not ask Renzi easy creditors to Checkout?
The arguments of 2008 – namely the fear that a creditor liability leads to a chain reaction – are not suddenly become obsolete just because swore the policy, the banks do not again to rauszureißen taxpayer expense. Nobody knows what happens when you Geldhäuser in a big way “handles” (vulgo: lets go bankrupt). Besides Renzi drives yet another, probably even greater concern: Among the bondholders of Italian banks are very many small investors. If Renzi allows them to lose their money, that could a political suicide come. The conflict situation is so to say the least, extremely complex.
What is the risk that the Italian banking crisis radiates to other countries?
It is not at least small. In total, European banks are sitting on bad loans in the amount of around 900 billion euros.
What do the German banks?
Thanks to the stable economic situation are the failure rates for traditional loans for businesses, consumers or homeowners in this country is extremely low. This does not mean that banks dastünden splendidly. The German bank is still suffering from contaminated sites, which led last year to a horrendous loss of seven billion euros. And Commerzbank has never really recovered from the financial crisis. There are also problems with the impaired exposures ship loans. Of which – besides Commerzbank – especially the Landesbanken concerned. However, the biggest hardship threatens elsewhere: Given the low interest rates, banks do more and more difficult to achieve reasonable margins in the lending business. This problem will worsen in the coming years
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Threatens the next financial disaster?
Nothing more than speaks against it. Because despite all the difficulties described – it is not so, that the measures taken in recent years have not borne fruit. For example, thanks to the stricter capital rules should most European banks possible losses now put away better than in 2008. In any case provided, the situation with that time is difficult to compare. In the new millennium the banks were their speculations undoing. Today, they are dependent on factors that they have only limited influence themselves, namely economic and interest.
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