Thursday, 16 May 2013
Chart of the Day - Too many European banks and why the deleveraging has only just started
"Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning." - Winston Churchill
This chart of the Day extracted from Bank of America's note Banking on the Banks from the 16th of May clearly illustrate why the deleveraging has only just started in Europe:
Why the credit crunch in European countries?
Because this deleveraging was as well accelerated by the fateful decision taken by the European Banking Association of imposing European banks to reach a Core Tier 1 capital ratio of 9% by June 2012. It has not only broken the credit transmission mechanism to the real economy in Europe but as well caused a credit crunch:
- source Bank of America Merrill Lynch
"What we call the beginning is often the end. And to make an end is to make a beginning. The end is where we start from." - T. S. Eliot