Economic Stimulus is Putting Profits of Europe’s Banks at Risk, Warns ECB

Investors Are Concerned About the Profitability of the Banking Sector

by Peter Spence

Economic stimulus in the eurozone may soon risk undermining the profits of the continent’s banks, the European Central Bank’s chief economist has warned.

Peter Praet said that “the profitability of the sector will be a key consideration” in assessing how the central bank can help to stimulate the euro area economy.

The ECB board member said that banks had been passing on lower interest rates to their customers because of competition. “In a relatively narrow market where there is still overbanking, you compete for the few customers that you have,” he said.

Continue Reading at…