Report
Are European banks still short of capital?
It is often claimed that despite the tightening of regulations and the increase in regulatory capital ratios, European banks still do not have enough capital and would still be un able to weather a serious crisis. We seek to determine whether this theory is correct by looking at whether, in the event of a serious crisis in the euro zone, euro-zone banks’ capital would enable them to offset: Losses caused by a rise in household and corporate default rates on loans; Losses on the other assets that the banks hold , which raises the question of the status of the government bond portfolios held by euro-zone banks. We see that in 2018, euro-zone banks’ capital largely cover the possible losses on their assets (loans, other assets).
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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