Tue, May 24, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

As European banking union sputters, hedge funds see distressed opportunities

Thursday, October 31, 2013

Bailey McCann, Opalesque New York:

The European Banking Authority (EBA) has released its first risk dashboard, assessing the state of play in the bloated European banking sector as finance ministers tussle over the particulars of a proposed banking union. According to a statement from the Authority, the banking sector overall has improved and banks have more capital on hand but many of them still rely on central banks to serve as a backstop.

The overall size of the European banking system represents trillions of dollars in assets relative to its small geographic area and overall economic weakness. The risk dashboard notes that asset quality in the system remains a source of concern even as the eurozone has seen some stabilization. The ratio of impaired loans and past due loans (>90 days) to total loans was found to have increased. Profitability has shown some signs of recovery, but Return on Equity (RoE) remains at low levels.

This structural weakness presents a problem for not only the banks themselves, but the EU as a whole, the size of the banking system is a liability to the governments inside the EU should any major shocks upset this tenuous balance. Moreover, the broader credibility of the ECB is directly linked to its ability to help consolidate and unwind some of the toxicity in the system. "Part of the problem is the market is all over the place about where the problem is, you can find arguments for Italy, Germany, Spain and just as many arguments saying......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other voices: What current trends tell us about the future of the hedge fund industry[more]

    By: Don Steinbrugge, Agecroft Partners The following comments are excerpted from Agecroft Partners’ Don Steinbrugge’s presentation delivered at the 69th CFA Institute Annual Conference held on May 9th, 2016 in Montreal. In Mr. Steinbrugge’s session titled "What Current Trends Tell Us about th

  2. Investing - Steve Cohen boosted Sotheby’s stake to $86 million last quarter, Larry Robbins' hedge fund sells off all CHS, UHS hospital stocks, Tiger Global cut stakes in Amazon, JD.com, Apple last quarter, Invest in real estate near biotech hubs, Prudential’s Hyat says, Valeant: A hedge fund hotel wrecking ball[more]

    Steve Cohen boosted Sotheby’s stake to $86 million last quarter Billionaire trader and art collector Steve Cohen is on a buying spree of Sotheby’s shares. Cohen’s Point72 Asset Management acquired 1.2 million Sotheby’s shares, bringing its total to 3.2 million valued at $86.1 million at

  3. Legal - Boaz Weinstein wins round in fight with Canada’s PSP[more]

    From FT.com: Boaz Weinstein, the hedge fund manager credited with spotting JPMorgan’s “London Whale” in 2012, has won a round in a legal battle with Canada’s Public Sector Pension Investment Board that had become a test case of responsibilities when clients withdraw money. PSP sued Mr Weinstein and

  4. Regulatory - The latest Fannie and Freddie reform bill offers a bonanza for hedge funds[more]

    From WSJ.com: The latest housing finance reform bill making the rounds on Capitol Hill offers a bonanza for hedge funds seeking to cash in on their investments in Fannie Mae Mae and Freddie Mac—but the cost to taxpayers would be steep. Congressman Mick Mulvaney, the South Carolina Republican, introd

  5. West Virginia objects to Alpha Natural sale to hedge fund[more]

    From AP/Heraldcourier.com: West Virginia's environmental authority has filed an objection to the proposed $500 million sale of Alpha Natural Resources' assets to a hedge fund, arguing that the deal could leave the state holding hundreds of millions in reclamation liabilities. The Register-Hera