zeb/market flash (Issue 3 – October 2012) Short-term recovery of Western banks – However, outlook still negative

Key topics

1. Global economic climate

  • The global economic environment got worse as GDP growth rates and forecasts declined around the globe
  • ECB support promote Western European sovereign CDS spreads significantly – decline of 50% within one quarter only

2. Key banking drivers

  • In Q3 2012, market volatilities and uncertainties clearly calmed down – the euro recovered moderately
  • The interbank funding situation improved considerably with positive effects on the banks’ margins

3. State of the banking industry

  • Central bank support in Europe and the US boosts banks’ equity performances in these regions with double-digit TSR figures outperforming BRICS countries in Q3 2012
  • Impact also visible on debt side as average CDS spreads of banks declined significantly and series of rating downgrades was brought to an end despite weaker economic conditions
Picture: La Défense, Paris
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Author Dr. Dirk Holländer

Dr. Dirk Holländer

Senior Partner Office Frankfurt

Volker Abel

Senior Manager zeb Frankfurt
Author Dr. Ekkehardt Bauer

Dr. Ekkehardt Bauer

Senior Manager Office Münster

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