zeb.market.flash (Issue 11- October 2014)

Key Topics

1. State of the banking industry

• Global banking industry with significant increase in market cap and solid TSR performance – global top 100 banks best performing industry in Q3 2014
• Stable CDS spreads – AQR and stress test uncertainties not yet reflected

2. Key banking drivers

• Strong GDP growth in the US accompanied with rise of inflation and interest rates and improving loan quality
• Interest and inflation rates further decreasing in Germany
• Shrinking global investment banking revenues – volumes down by more than 20%

3. Special topic: Bank separation and RRP—the end of universal banking?

• Structural separation and recovery & resolution initiated to end Too Big To Fail problem
• Structural reforms will significantly affect profitability of universal banks

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