Related Topics
European Markets , Economy , Stocks
     

Global Banking: Some Sectors Look as “Precarious as Ever”

“Financial flameouts” are occurring despite relief from the European Central Bank

by Bob Stokes
Updated: October 13, 2020

Most people remember that the entire global financial system teeter-tottered on collapse during the 2007-2009 financial crisis due to the debacle related to subprime mortgages.

As you'll recall, even a financial institution as large as Citigroup was brought to its knees.

Of course, that was more than a decade ago and the fear of a "financial Armageddon" would seem to be a distant memory.

However, here in 2020, some European banking sectors appear to be on shaky ground, despite the European Central Bank's regulatory relief.

As a Sept. 17 Bloomberg article notes:

Banks Get More Capital Relief as ECB Wants Stimulus to Work

With a looser leverage ratio for the next nine months, banks will be able to make more loans with less capital.

Mind you, this is a fourth round of regulatory relief. Even so, some of the Continent's banks remain in a highly precarious position.

Our October Global Market Perspective showed these charts and said:

BanksEurope

The ECB agreed to a fourth round of relief only because the previous three rounds failed... In total, the four rounds of regulatory relief equated to €73 billion, yet, for all the ECB's hard work, some banking sectors look to be as precarious as ever.

The snapshot comes from Spain, where Banco Sabadell, Spain's fifth-largest banking group, has barely retraced any of its 73% crash since December 2019. BBVA also continues to make fresh new lows, and Bankia... is still off 33% since last year's high.

Clearly, the weakening position of these banks, even with all the financial assistance, is not a good development.

Yet, there's even more cause for concern.

The October Global Market Perspective also analyzes the "financial flameouts" of two other European banks, one of which is a global giant.

Get our latest analysis now, so you can prepare for what may be just around the corner.

Here's How Elliott Wave Experience Counts

Does experience count?

It's true that no amount of experience can guarantee successful global market forecasts.

Yet, keep in mind these words from the Wall Street classic book by Frost & Prechter, Elliott Wave Principle: Key to Market Behavior:

Without Elliott, there appear to be an infinite number of possibilities for market action. What the Wave Principle provides is a means of first limiting the possibilities and then ordering the relative probabilities of possible future market paths.

That's how our global team of Elliott wave analysts can help you -- starting now.

Learn how to get instant access to EWI's latest commentary on global stocks, rates, metals, currencies, crypto- and much more.

Our Global Market Perspective covers 50+ markets worldwide!

Learn more by following the link below.

Crude Oil Erases Early October Gains: The "Key" Level that Made All the Difference

When crude oil prices broke below critical price support, our Energy Pro Service made sure subscribers were ready for the opportunity. See the chart and analysis right now.

How to Stay Ahead of Price Turns in the U.S. Long Bond

Back in August, the volatility index for Treasury debt was at an all-time low. Bond market observers were discussing “fresh reasons to stay record bullish.” Yet, Elliott wave analysis was sending a different message. Let’s review.

EXCLUSIVE

Trump vs. Biden: Discover What the Stock Market Says About the Race for the White House

The presidential race is in the home stretch. What does the market say about who is likely to win? And what will a Trump re-election or a Biden victory mean for the stock market?