European Banks At Risk Of Bail Ins In 2015 – Moody’s and S&P Warn
By Mark O’Byrne
GoldCore.com
9 December 2014
Europe’s banks are vulnerable in 2015 due to weak macroeconomic conditions, unfinished regulatory hurdles and the risk of bail-ins according to credit rating agencies.
The economic outlook for European banks in 2015 will be hampered by weak profits, risks of bail-ins and litigation charges, Moody’s Investors Service announced Monday.
“Weak macroeconomic conditions will continue to weigh on Europe’s banking sector in 2015 and banks’ low overall profitability implies that Europe’s banking sector remains structurally vulnerable,” Moody’s Europe, Middle East and Africa financial institutions group managing director said in a statement.
“The European banking industry remains structurally vulnerable,” said Carola Schuler, managing director at Moody’s, in a presentation on the sector’s outlook.
The agencies said moves to reduce implied government support for the banking sector and force bank debt holders to participate by coming to the aid of wayward lenders would also put downward pressure on bank ratings.
“The European bail-in tool decreases the predictability of state support,” said S&P managing director Stefan Best in a separate presentation on banking prospects.
As a result, S&P has a negative outlook on certain European banks. The agency will review in early January its credit ratings for banks in Austria, Germany and the UK, three countries that plan to translate EU bank resolution and recovery rules into national law ahead of the scheduled EU start in January 2016.
The Rest…HERE
