Sunday, 20 May 2018
Friday, 18 March 2016 11:49

The Next European Banking Crisis Looks to Be Upon Us Featured

Written by
Rate this item
(5 votes)
Veritaseum founder, Reggie Middleton, has accurately called the banking crisis, European sovereign debt crisis, the housing & CRE crash as well as several major tech paradigm shifts over the last 10 years. Click graphic above for a video synopsis of his track record.

Cyprus Bank NPLs

The 2008 financial crisis and ensuing recessions have resulted in crisis in the global banking sector. Borrowers’ inability to make pay back debt or even service debt due to an economic slowdown had hurt the banking system. Contrary to popular rhetoric, the European economy is still far away from recovery and so are the banks that are domiciled there.

 

The sector is grappling with barrage of concerns including negative interest rates, elevated levels of NPL, China’s synthetic growth engine facing the real reality of a slowdown, the softening of apparently elevated oil prices and impending regulatory and litigation costs. 

The big banks in Europe have witnessed major reshuffles in 2015 with new CEOs taking over at Barclays, Credit Suisse, Deutsche Bank, and Standard Chartered. In the same year, Deutsche Bank lost a record (as in the most, ever) €6.8 billion ($7.6 billion). Europe’s banking barometer, the Stoxx Europe 600 Banks Index recorded seven straight weeks of loss in 2016, its longest weekly losing stretch since 2008 -  speaking of which…              

The Impact of Rising NPLs

The economic slowdown left many European countries with high levels of NPLs. The corporate sector has a higher share of NPLs within which SMEs exhibit the greatest concentration of NPL. Notably SMEs contribute almost two-thirds of Europe’s output and employment, and are more reliant on bank financing than large firms who have access to the capital markets. While NPL level is very high in Europe, writeoff rates are too low, less than a quarter of that in the United States despite the fact that the US is actually increasing loan loss reserves—creating a buildup of impaired assets nestled and likely hidden in bank balance sheets.

High NPLs affect profitability as it requires banks to raise provisions, which lowers net income. This creates a perverse incentive for banks to hide non-performing assets through methods ranging from creative accounting mechanism to outright misrepresentation. Whether NPLs are reported accurately or not, they are still non-performing, hence they when carried on banks’ books they usually do not generate income streams comparable to performing assets. NPLs, net of provisions, may also tie up substantial amounts of capital due to higher risk weights on impaired assets. In addition, a deteriorating balance sheet raises a bank’s funding costs because of lower expected revenue streams and, hence, heightened risk perceptions on the part of investors. Together, these factors result in some combination of higher lending rates, reduced lending volumes, and increased risk aversion – all at a time when much of the EU faces recessionary and deflationary pressures from within and abroad.

The next installment of this report will delve into the nitty gritty of what's going on. Here's a hint: half of all of the loans that have been made in Cyprus are NPLs (non-performing loans). That means 50% (actually, it's 49%) of the business that the banks have wrote half failed or are failing.

Cyprus Bank NPLs

This is at a time when the ECB has pushed rates negative, and pushing it even more into the negative.

Negative rate snapshot

This is at a time when the EU area regions are entering recession. This is at a time shortly after the Cypriot banks have been bailed-in - taking the depositors money to recapitalize the banks in lieur of the bank investor's money. Reference actual bank statements showing capital being confiscated.

Laiki Bank has offers details...

DecreeEN Page 1

It's not just Cyprus, either! Purchase the introduction to the report here for $25, directly through the blockchain. The follow-up reports will delve into individual bank situations and offer our team's opinions of each.

This was all foretold 6 years ago...

Read 3211 times Last modified on Monday, 08 August 2016 13:17

5 comments

  • Comment Link Sir. Mareo Constantine Godbolt-Oldacre Sunday, 25 February 2018 04:00 posted by Sir. Mareo Constantine Godbolt-Oldacre

    This message is for Reggie please,


    Hello Reggie it's has been a very long to since I spoke to you on the phone on or around about three years ago. I'm glad to see that you doing well. Damn ! I missed out on investing earlier but as they say it's never too late. You helped me to setup my account with your company but now I'm having trouble remembering my login and password. It seems to me the email is not synced with what I'm putting in. I do have my wallet address but no password. Is there a way I can retrieve my account without having to create a new one? Please get back to me so I may submit may submit to you my wallet ID if needed. Have you talked to Max Kaiser lately. Please let me know if it's possible to get into my account with a wallet ID. I don't have a password or don't remember it. I would love to be a part of your team becuase the train is about to leave the station for good and I don't want to miss the last round, because I've always liked your approach to Block-chain and or Bitcoin. I'm very glad for you and hope all is well. Here is my number if needed (802) 766-3044 mobile (802)829-8073


    Best Regards


    Mareo

    Report
  • Comment Link Sir. Mareo Constantine Godbolt-Oldacre Sunday, 25 February 2018 03:53 posted by Sir. Mareo Constantine Godbolt-Oldacre

    This message is for Reggie please,


    Hello Reggie it's has been a very long to. I spoke to you on the phone on or around about three years ago. I'm glad to see that you doing well. Damn ! I missed out on investing earlier but as they say it's never too late. You helped me to setup my account with your company but now having trouble remembering my lo in and it seems to me the email is not synced with what I'm putting in. I do have my wallet address but no password. Is there a way I can retrieve my account without having to create a new one? Please get back to me so I may submit my wallet ID if needed. Have you talked to Max Kaiser lately. Please let me know if it's possible to get into my account with a wallet ID. I don't have a password or don't remember it. I would love to be a part of your team because I've always liked your approach to Blockchain and or Bitcoin. I'm very glad for you and hope all is well.


    Best Regards


    Mareo

    Report
  • Comment Link van cleef and arpels diamond earrings imitation Wednesday, 30 August 2017 19:28 posted by van cleef and arpels diamond earrings imitation

    Massive- since some individuals prefer something more typical and respectable size timepieces may possibly not be good by all view lovers. However, a size that is regular is in fact improper to all styles of watches.
    van cleef and arpels diamond earrings imitation http://www.topbijoux.cn/en/sweet-copy-van-cleef-alhambra-yellow-gold-earrings-white-mother-of-pearl-round-diamonds-p253/

    Report
  • Comment Link michael kors purses Tuesday, 29 August 2017 20:26 posted by michael kors purses

    This web site is known as a stroll-through for all of the info you needed about this and didn抰 know who to ask. Glimpse here, and also you抣l undoubtedly uncover it.

    Report
  • Comment Link http://www.cheapraybans.net/ Wednesday, 30 November 2016 06:05 posted by http://www.cheapraybans.net/

    Dear friend
    That post is very helpful,it give me much help,thank you!

    Report

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

Contact

Veritaseum

1-718-407-4751

info@veritaseum.com