Trump effect on the eurobanks
Trump’s Rule-Slashing Is Bad News for Europe’s Banks
You are Equity Analyst at a large European Hedge Fund.
In the context of the dramatic rally in US banking stocks since the US presidential election, and the potential repeal of Dodd Frank (see above), you have been asked to write a report for the fund’s CIO (Chief Investment Officer) analyzing the European banking sector.
You have been specifically asked to critically evaluate how the following issues (non-exclusively) have hampered the recovery of European banking sector:
- The implementation of Basel III;
- The challenge of low (negative) interest rates;
- The legacy of non-performing loans on bank’s balance sheets;
- The risk of a renewed Euro-zone sovereign debt crisis.
On the basis of this assessment you have also been asked to comment on the current valuation of the European banking sector, and recommend whether the fund should reassess its current significantly underweight position in the Euro STOXX Bank Index.
Students are encouraged to independently research, present their own findings, and support their work with figures, graphs, excel files and other materials wherever applicable.
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