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European Banking Industry: Difference between revisions
→Unrealized Losses
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=== Unrealized Losses === | === Unrealized Losses === | ||
Research by MorningStar states that European central banks don't have the same fundamentals in their unrealized losses and funding strategies as the ones that cause regional banks in the US to fail. | Research by MorningStar states that European central banks don't have the same fundamentals in their unrealized losses portfolios and funding strategies as the ones that cause regional banks in the US to fail. | ||
In Europe, banks have a smaller proportion of debt securities where the marked to market is not reflected in capital ratios. | In Europe, banks have a smaller proportion of debt securities where the marked to market is not reflected in capital ratios. | ||
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* On average, EU banks have an LCR of 200% and an NSFR of around 130% at end-2022. <ref>https://www.dbrsmorningstar.com/document/410978.pdf?Expires=1679953758&Policy=eyJTdGF0ZW1lbnQiOlt7IlJlc291cmNlIjoiaHR0cHM6Ly93d3cuZGJyc21vcm5pbmdzdGFyLmNvbS9kb2N1bWVudC80MTA5NzgucGRmIiwiQ29uZGl0aW9uIjp7IkRhdGVMZXNzVGhhbiI6eyJBV1M6RXBvY2hUaW1lIjoxNjc5OTUzNzU4fX19XX0_&Signature=MUfrM-q6GsGHoZh5bmhqKoyhvydbvybPNXCL9MOUAvt2wr1cV5XtPO2gngp2~i0JmX7MjqWUkXTaXgfngq7sUAtd5KUr18D-uemzqmu9KTzu6klioWQdDGEeL3nA0GJsF4Sa7yGvGjBmNWk7zA1z0b0YE6Nt-~cn5qFbbJkCqGWAr9nfzSAKUuacLu-fS4Fbl7ZKhMZRci-2hMhMEl4tSnOMASV8P0aMIuuuI73I~XTSkAaqWKxGGETQ-y-xxTsL5Y9jSRKJ8wCw6BEWWJg7Lv1P0EjD0~JGK6c2mKW~b0WxlgIlZaKrBvSCrJAFTReLqfW8ds82niBC-goGx4YXvw__&Key-Pair-Id=KNWV36WLG7L4J</ref> | * On average, EU banks have an LCR of 200% and an NSFR of around 130% at end-2022. <ref>https://www.dbrsmorningstar.com/document/410978.pdf?Expires=1679953758&Policy=eyJTdGF0ZW1lbnQiOlt7IlJlc291cmNlIjoiaHR0cHM6Ly93d3cuZGJyc21vcm5pbmdzdGFyLmNvbS9kb2N1bWVudC80MTA5NzgucGRmIiwiQ29uZGl0aW9uIjp7IkRhdGVMZXNzVGhhbiI6eyJBV1M6RXBvY2hUaW1lIjoxNjc5OTUzNzU4fX19XX0_&Signature=MUfrM-q6GsGHoZh5bmhqKoyhvydbvybPNXCL9MOUAvt2wr1cV5XtPO2gngp2~i0JmX7MjqWUkXTaXgfngq7sUAtd5KUr18D-uemzqmu9KTzu6klioWQdDGEeL3nA0GJsF4Sa7yGvGjBmNWk7zA1z0b0YE6Nt-~cn5qFbbJkCqGWAr9nfzSAKUuacLu-fS4Fbl7ZKhMZRci-2hMhMEl4tSnOMASV8P0aMIuuuI73I~XTSkAaqWKxGGETQ-y-xxTsL5Y9jSRKJ8wCw6BEWWJg7Lv1P0EjD0~JGK6c2mKW~b0WxlgIlZaKrBvSCrJAFTReLqfW8ds82niBC-goGx4YXvw__&Key-Pair-Id=KNWV36WLG7L4J</ref> | ||
S&PGlobal has a similar opinion | S&PGlobal has a similar opinion: | ||
* "S&P Global Ratings maintains its view that, overall, European banks benefit in the rising interest rate environment. This remains our base case. As we said last week, rated European banks do not exhibit a combination of large unrealized losses on securities portfolios and highly confidence-sensitive funding models. Credit Suisse is an outlier among major European banks. We see the business and risk management deficiencies that led to Credit Suisse's takeover by UBS as quite unique in nature and scope relative to the European banking sector" | |||
== References == | == References == | ||