zeb.market.flash (Issue 10 – July 2014)

Key topics

1. State of the banking industry

• Global banking industry with solid increase in market cap and positive TSR — but global top 100 banks worst among all industry sectors
• Western European banks with negative TSR

2. Key banking drivers

• Surprisingly sharp drop of US GDP, but Western Europe continued its recovery
• ECB and Fed’s monetary policy lowered long-term interest rates again in Q2 2014, leading to even flatter yield curves — German interest rates back at their level of 2012
• Investment banking clearly improved with higher volumes in all segments

3. Special topic: The EBA stress test—challenging the European banking sector’s substance

• EBA stress test is the next core element in ECB’s Comprehensive Assessment
• EBA currently analyzes delivered results and refines methodology and calibration
• Results are expected at end of October

Picture: Skyline Toronto