European banks are stronger than their U.S. rivals, analysts say. Here's why
European banks are looking stronger and more attractive than their U.S. counterparts on many metrics, according to officials and analysts speaking at the Institute of International Finance conference in Brussels this week, who add that regulation and collaboration is still needed to boost growth in the region.
The biggest bank in the U.S. is worth what the top nine or 10 European banks are due to weaker growth and less profitability since the 2008 financial crisis, Ana Botín, executive chair of Spain's Santander Group, told CNBC at the event on Tuesday.
However, the top European banks have better levels of credit default swaps, a form of insurance for a company's bondholders against default, «which means that fixed income investors think the risk of our debt is lower than the best banks in the U.S.,» Botín added.
The recent volatility that led to the sale of Credit Suisse to UBS was not evidence of a systemic banking crisis, she said, but rather mismanagement and liquidity issues at specific banks.
«We are in a very strong position in terms of capital, liquidity supervision, protection of our customers' data. But we also need a bit more capacity to support growth so we can be more profitable,» she said.
«What we need is a fundamental rethink of what do we want banks to be in the new economy in a world that needs growth. And finding that balance is really important between being prudent, we're not saying that we should go back on that, but also being able to finance growth,» Botín continued, adding this would be a key theme at the IIF's conference.
European banks are «safer, stronger, cheaper» than U.S. ones said Davide Serra, chief executive officer of Algebris Investments, who stressed the higher liquidity ratio of
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