NYU V-Lab’s SRISK is a useful way to track systemic risk trends and inflection points for banking company meltdowns. Still, it has been dialed down by the general rally in US bank stocks. We explore ways to adjust for this bullish environment by uncloaking the underlying systemic factors that can unexpectedly erupt.
Break out the champagne as the 10th Anniversary of the Financial Crisis is celebrated this week. Time flies when you are not having credit analysis fun, but the work needed to be done. Review brief history and suggestions for future action.
The Monte dei Paschi saga illustrates all that is wrong in Italian banking & European bank restructuring. Still Italy declares banking victory & investors/reporters take off rest of summer vacation. Mangia & Bere Vino! Monte Monte Monte Intesa Intesa Intesa UniCredit UniCredit UniCredit
Scandinavian banks may not be as good as they as advertised by the markets as their economic earnings are poor. High wall-like capital levels and low credit noise has helped the image, but we believe they are A-rated. Danske Dankse Dankse DNB DNB DNB Nordea Nordea Nordea Svenska Svenska Svenska Swedbank Swedbank Swedbank SEB SEB SEB
Moody's messes up with rating categories for Aussie banks, and we disagree on the housing/consumer debt concerns. Big 4 should weather well given strong economic earnings and low-risk systemic indicators. Buy Big 4 versus Canadian banks of similar ratings. Westpac Westpac Westpac ANZ ANZ ANZ CBA CBA CBA Macquarie Macquarie Macquarie NAB NAB NAB
Big Bank CCAR was a media yawn, but instructive on how some banks are turning it around like BAC, while others are using shareholder payouts to disguise weak operating metric improvements like Citi. JPM and WFC kick it. Big brokers, GS & MS do well too. Citi Citi Citi BAC BAC BAC JPM JPM JPM WFC WFC WFC GS GS GS MS MS MS COF COF COF AXP AXP AXP
The Venice banks sank into the regulatory banking lagoon as Italian state support swoops in. Intesa buys them for a pittance 1 euro. Sr. unsecured debt impairment avoided, but major Euro banks will see more bond volatility due to poor economic earnings. UCG UCG UCG ISP ISP ISP
The last seven years of DFAST has slimmed down the banks girth better than a Marie Osmond Nutrisystem regime. Really, things are better, but there is always a new round of credit crud threatening the banks waist-lines. citi citi citi bac bac bac gs gs gs jpm jpm jpm ms ms ms amex amex amex cof cof cof pnc pnc pnc usb usb usb
Treasury's report is similar to H.R. 10 the Financial CHOICE Act's view that Wall Street's animal-spirits should be unleashed to boostrap US GDP growth thus creating jobs and overall personal wealth. Community banks emphasized, but cover for the capital markets cabals underlying goals.
European bank contagion can not be ruled out as the Spanish bank events POP-ed the bubble on debt impairment out of line with bail-in rules. We review other major Euro banks and threats to sr. unsecured debt layers. Barclays Barclays Barclays Santander Santander Santander BBVA BBVA BBVA Popular Popular Popular Deutsche Deutsche Deutsche Suisse Suisse Suisee BNP BNP BNP Socgen Socgen SocgenBNP BNP SocGen SocGen