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The Times here in London has published a story about a potentially challenging new phase banks may be entering given their exposure to very low interest rates, commodity price collapse (which is a price shock to some of their C&I clients), and continued regulatory upheaval. Harry Wilson and Simon English write that the market appreciates the cause for potential alarm and present as evidence recent share price plunges at a number of high street banks and widening credit spreads/default risks. The authors identify eight risks to banks, including the slowdown in China, countercyclical capital requirements, conduct worries, litigation, interest rates, the economy, competition and challenger banks (read fintech?), and continued public mistrust. In the US, most of financial needs are not bank financed by instead financed by a robust non-bank market. However Europe remains heavily bank financed, perhaps up to 80% (Wehinger, OECD Journal 2012). So bank health remains a key concern in Europe The Times article is found here: http://www.thetimes.co.uk/tto/business/industries/banking/article4695015.ece
The Times here in London has published a story about a potentially challenging new phase banks may be entering given their exposure to very low interest rates, commodity price collapse (which is a price shock to some of their C&I clients), and continued regulatory upheaval. Harry Wilson and Simon English write that the market appreciates the cause for potential alarm and present as evidence recent share price plunges at a number of high street banks and widening credit spreads/default risks. The authors identify eight risks to banks, including the slowdown in China, countercyclical capital requirements, conduct worries, litigation, interest rates, the economy, competition and challenger banks (read fintech?), and continued public mistrust. In the US, most of financial needs are not bank financed by instead financed by a robust non-bank market. However Europe remains heavily bank financed, perhaps up to 80% (Wehinger, OECD Journal 2012). So bank health remains a key concern in Europe The Times article is found here: http://www.thetimes.co.uk/tto/business/industries/banking/article4695015.ece
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