Finance forum: Banks and banking products 66 articles - 9.157 readings

Banks are businesses in every way. They’re engaged in preserving savings and administering credit. They’re fundamentally important economic actors –both for the present economy and financial markets. On one hand, they connect the deposits market with the credit market. On the other hand, they’re the primary providers of financial products. They offer services and products ranging from savings to capital investments.

Rates boost European banks' profits and improve outlook for investing

Posted on 16.11.2023

Interest rate hikes (which appear to have peaked) are boosting banks' earnings and improving the sector's investment outlook. Interest rates and Commerzbank Rising interest rates tend to make lending more profitable, as they increase the profit margin for those institutions that lend in the form of mortgages or financing. It is therefore not surprising that some banks are doing very well. To take the first example, this is the case with Commerzbank. In the first nine months of the year ...

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Central banks: rate hike looks over, but it's too early to talk about cuts

Posted on 10.11.2023

The European Central Bank (ECB) appears to have ended its rate hike cycle, but as with the Bank of England and the Federal Reserve, it is not yet possible to predict when rate cuts will begin. The ECB's hike cycle appears to be over, but it is too early to talk about cuts Between August and September there was a sharp fall in inflation in the eurozone, with the measure of the erosion in the purchasing power of money falling to 4.3%. This was compounded by the words of the Governor of the B ...

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European bank profits and shares soar, but recession risk remains

Posted on 19.09.2023

Rising interest rates have boosted European bank profits and share prices. However, inflation, recession in Germany and economic difficulties in the Old Continent pose risks to the banking sector. Comparison of European and US bank performance The European banking sector has enjoyed a remarkable period of growth. As Markus Frühauf writes in the Frankfurter Allgemeine Zeitung (FAZ), the consultancy Ernst&Young (E&Y) has calculated that the ten largest institutions have seen their r ...

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AT1 bonds: what are they and what are the risks?

Posted on 19.09.2023

AT1 (which stands for Additional Tier 1) is an acronym that many people did not know until a few months ago. However, it has been in the financial news more and more lately, so Vontobel Asset Management explains what it is and the risks it entails. When Swiss banking giant Credit Suisse was on the brink of collapse and had to be rescued by UBS, AT1 bonds went into free fall. This is because the bailout of Credit Suisse wiped out the value of AT1s and those who bought them saw their entire invest ...

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Recession risk also hits shadow banking system

Posted on 28.08.2023

The risk of a recession could also pose a major risk to the credit market. However, it is not only the banks that financial regulators seem to be worried about, but also the shadow banking system. Edoardo De Biasi writes about this in 'Corriere della Sera' and shows the interconnectedness of recession risk, banks and the shadow banking system. The shadow banking system The provision of credit is not only an activity of banks, but also of a significant number of NBFIs, i.e. non-ban ...

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What’s Hot – Italian banking stocks (overly) hit by the new “windfall tax”

Posted on 11.08.2023

What’s Hot – Extra-taxation on the "windfall profit" of the Italian banks: a lightning bolt, but not out of the blue. The tax on banks’ extra-profits, which was discussed in the spring and then seemed to have been shelved, has bluntly returned, amid a holiday atmosphere. The world of Italian banks is in turmoil, but avoids, for now, "official statements", waiting for the law draft to be published in the "Official Gazette" and subsequently converted ...

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Uncertainty grows over US banks after Moody's downgrade

Posted on 10.08.2023

The crisis in the US banking system appears to be far from over, as the latest downgrade from Moody's shows. Moody's downgrade About a week ago, Fitch downgraded the US debt rating from AAA to AA+. This was followed today by a downgrade from Moody's, but this time it affects a number of US banks, ten in total, plus six under watch. These are medium and small banks, but there are also some larger institutions, including State Street, BNY Mellon, Trust Financial and US Bancorp. Weak ...

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Italy will tax bank windfalls at 40 per cent

Posted on 09.08.2023

The Italian government's decision to impose a 40% tax on banks' windfalls (due to rising interest rates) has been the subject of debate both at home and abroad, and on the stock market it has hit banking stocks the hardest, as might be expected. A tax on bank profits from rising interest rates The Italian government, led by Giorgia Meloni, has decided to impose a tax on banks' 'extra profits' ('windfalls') resulting from the European Central Bank's interest ...

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