European banks


European Banks Strategy: The monetary policy cacophony

BOfAML | It is difficult for forward guidance to be credible when the institution is discussing whether any of its tools or targets are likely to be around in a few months. Embarking on a wide ranging discussion about monetary policy targets, communication and tools, with 25 relevant ECB board members, guarantees a cacophony. Volatility lies ahead for sure, we think.


BCE.TC

46% of liquidity in ECB exempt of depo rate: periphery banks benefit most

Santander Corporate & Investment | Although the new deposit rate that is applied to bank liquidity in the ECB has increased 10 bp to -0.5%, the new tiering system will compensate for this increase and allow the European banks to reduce the interest from the previous -0.4% to -0.27%, as some 750 Bn€ remains exempt of payment (considering that part of the total of 788 Bn€ which supposes 6X the current reserve requirement of 131 Bn€ exceeds the excess of reserves of countries like Italy).







European banks

Mystery behind European Banks vs Utilities PER differential

In April 2018 both banks and utilities had practically the same PER, around 12.5.  Since then there has been an extreme relative movement between them, with electricity companies getting more expensive and banks cheaper, analysts at M&G Valores point out.