May 23, 2024 07:23 GMT
MNI BRIEF: Headwinds For EU Banks As Profitability Boom Ends
(MNI) LONDON
(MNI) London
ECB Vice President de Guindos looks financial stability issues in the banking sector.
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European banks are resillient and in good shape but they face potential headwinds in the future as the rate-rally driven “increase in profitability won’t last for ever” due to weak economic activity, non performing loans and higher financing costs, ECB vice president Luis de Guindos said in an interview with Oberösterreichische Nachrichten published Thursday.
The great degree of uncertainty makes it impossible now to decide the number of interest rate cuts “or on their size” for 2024, de Guindos said, adding that even if new hikes aren’t the ECB’s base scenario, “nothing is predetermined with regard to cuts or changes in interest rates”.
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