29-July-14
Eurozone banks of layoffs has unexpectedly reversed, despite regulatory pressure construction funds, partly by reducing its balance sheet.
May the collective eurozone bank assets grew by 0.5% in April and 0.4%, to € 30.87tn, for the first time banks have increased their balance sheets for two consecutive months since 2013, according to data from the European Central Bank.
The figures have raised concerns about the region's banks deleveraging also fell criticism over the years after the financial crisis, many banks are still "too big to fail" - to describe the banks by the regulatory agency is likely to require long-term taxpayer bailout funds if they encounter financial difficulties.
"The average level of their balance sheet is still three times the euro-zone gross domestic product (GDP), is the highest in the world," Alberto Gallo, macro credit research head of the Royal Bank of Scotland said.
Pressure on European banks to meet the rules of leverage and capital into, and based on their balance sheet is a snapshot from last December through next upcoming health check by European regulators, some atrophy.
"In December last year, the bank sold a large number of assets shrink, their balance sheets, such as sovereign bonds, to review the bank regulatory agencies to window dress coming after purchase before some people responded," Gallo said.
Expansion burst trend contrarian asset shedding, because in May 2012, when the bank's balance sheet highest € 34.8tn. However, last month, they resumed a downward spiral, down to € 30.72tn, although the ratio of the low level of € 30.4tn12 month.
By far the most cutting has been updated to achieve fewer loans, repo and derivatives contracts, and the sale of non-core businesses.
"The problem is that there may still be a way to deal with a regulatory" national champion "a second-tier bank collapse differences between the players," a banking analyst at Rabo bank Oliver Burrows said.
"The key is to ensure that both prepare to some extent, in how these services will be split in the event of a failure in terms, but if a large bank failure unrest is still considerable, if not the same as Lehman Brothers. "
Loans to non-financial corporations have been deleveraging since mid-2012 the maximum casualties. This is making things difficult for regulators, who are keen to avoid "too big to fail," but at the same time to encourage lending, especially small and medium-sized enterprises, providing a majority of European employment.
These figures are by Christopher Flowers, the U.S. private equity firm specializing in financial services, who said the large capital buffer will not put the bank into a risk-free practical advice after.
Since the financial crisis, European banks have seen their equity drop 15.8% average return is only 4%.
"The theme is still deleveraging," Armin Peter, the European debt group UBS (UBS) official said. "Higher leverage and more regulatory capital generally require continuing trend forcing banks continue to shrink their balance sheets, thereby affecting the gains can be achieved."
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