Daily Note – A Hopeful Diagnosis?

imagesSummary

  • Systemic Financial Risk Brewing?
  • Don’t expect banks to run out of money!
  • Market’s overly pessimistic on growth?
  • United States: Housing Data holding up

Good Morning,

As we discussed yesterday, indicators of systemic financial sector risk – such as the rising cost of credit protection on European financials versus non-financials – jumped over the past month, reaching new highs last week and reflecting fears that a perfect storm of slower growth, lower yields and negative policy rates is brewing for bank earnings. If banks cannot meet or sustain required capital ratios via retained earnings, dividends will need to be cut and/or additional capital securities will need to be issued. Either way, the reasons for concern about capital securities is clear, more supply and not enough demand.

That said, there are some reasons to push back on these concerns.

Download a FULL PDF version of the Daily Note:

GlobalMacro360 Daily Note 17th February 2016

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Categories: Daily Note

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