For some time now, European banks have been experiencing negative market rates. In fact, it was at the beginning of 2019 that they started to have a significant discount on their reputation and on their finance. It was the US Federal Reserve that made the announcement and at this point in time it is already known throughout Europe. Even the large institutions are seeing the economic environment darken more and more. Not to mention the fact that competition is changing. But what are the dangers still hanging over Europe’s banks?
The still negative rate and the cyclical cloud
The banks have yet to reap any profits from around the world. At present, with the influence and consequences of the ECB’s monetary policy, this has become almost free of charge. But with the influence of the EQ, this has been a huge problem for some organizations. There are also the cyclical clouds that are causing enormous concern about the evolution and development of the bank. Indeed, in the past, banks have been lucky enough to emerge easily from bankruptcy. If they were worried, the only solution was no longer to apply for credit or make a loan. But at the moment this is no longer the case.
With the banking paradigm
One of the phenomena that can still hinder the development of European banks is the banking paradigm. A few years ago, however, before the crisis began, the banking industry was still fortunate enough to grow by more than 5% each year. But today it is only 2%. Moreover, with the evolution of technology, banks are beginning to lose their reputation. For example, many users prefer to contact private organizations to apply for loans.
The risk of money laundering and the regulatory constraint
European banks are also afraid of regulatory constraints. In this case, it is the global authorities that are constantly adding regulations, which in another way block the development of a financial institution that is already in trouble. And this despite the fact that in many cases it is new rules that improve the situation. Without forgetting that with the evolution of the world as well as the web, the risk of facing money laundering is big. It is essential to note that this last point is a concern that all banks worldwide still have to face.