ASSESSMENTS

European Banks' Struggles Will Continue

Aug 1, 2016 | 09:30 GMT

European Banks' Struggles Will Continue
Some financial institutions in Europe, especially in Germany, are chafing under the European Central Bank's negative interest rate policy, which they say is hurting profitability.

(DANIEL ROLAND/AFP/Getty Images)

European regulators officially consider most banks in the eurozone stable, despite the timid economic growth and low interest rates in the currency area. Most banks in the eurozone have enough capital to face a new economic crisis, according to stress tests by the European Banking Authority (EBA) on July 29. The tests come as the banking sectors of several EU members are dealing with multiple sources of vulnerability. In recent weeks, Italian banks have come under intense scrutiny from investors, analysts and politicians. Most of the attention has focused on Monte dei Paschi, which has required two state bailouts in recent years. Other institutions, including Italy's largest bank, UniCredit, have seen their share prices decline sharply in recent weeks. Since the beginning of the year, the shares of Germany's Deutsche Bank, weighed down by low earnings and multiple lawsuits, have dropped by half. Spanish banks are probably stronger than they...

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