Banks and the Future of Europe

Published on
October 15th, 2018
Duration
27 minutes

Banks and the Future of Europe

The Expert View ·
Featuring Jerry del Missier

Published on: October 15th, 2018 • Duration: 27 minutes

Copper Street Capital's Jerry del Missier - who previously served as Chief Operating Officer of Barclays Bank and President of Barclays Capital - unlocks the opaque landscape of European banking. Del Missier leverages his decades of banking experience to unpack the individual risks and opportunities within a sector he believes to be the key to future European economic growth. Filmed on October 9, 2018 in New York.

Comments

  • FA
    FELIX A.
    7 November 2018 @ 05:25
    With the ECB exiting their bond buying in sovereign debt in December 2018, the only major buyer of Italian issues in recent years is taken away. Italy 10Y credit spreads are already close to 400 Bps above Germany. Rising rates are irrelevant compared to this credit story. Banks swap fixed sovereigns for floating ones. Not to mention that nobody really buys full CDS protection against IG sovereign holdings, available instruments also hardly offer liquidity for outstanding debt of 2600 billion USD. In case there will not be any miraculous solution (such as a new ECB program), Italian Banks will be in negative equity territory once spreads widen 100 more Bps. Watch how Italian spreads move equity markets and bunds. Italian spreads are the story these days. This does not even take into account the trillions of NPLs still on balance sheets. One could also question, why Italian spreads are this far off in the first place. Is the market unjustified in pricing in Italy's default ? I do not think so. It is their easy way out.
  • K
    K.
    5 November 2018 @ 01:53
    This gentleman does not seem to understand the inherent and hidden risks in the EU. Perhaps this was just a sales pitch?
  • WM
    Will M.
    27 October 2018 @ 13:49
    Italian banks just look like a disaster waiting for either a massive bailout (bail-in). In either case it will be just the "next" European bond crisis. At what point does everyone realize the Euro will not survive and why can't they get ahead of this inevitability? It is extremely difficult to believe that Deutsche Bank can survive any future European banking crisis and that German government bail outs will be necessary. Jerry is clearly a sharp practitioner per his resume, but he is discussing a very dry topic and it feels like he was somewhat political in his comments. Just didn't do it for me as an informative narrative on the banks......and the trouble Europe is really in.
  • BW
    Benjamin W.
    26 October 2018 @ 22:25
    #Mises
  • CE
    Carol E.
    21 October 2018 @ 20:37
    Since 2005, 50 European banks and a Swiss Bank conspired along with their traders and stoled 55 billion euros from European as well as American Tax Payers. This was a scam lead by Germany & a story on the front page of October 19, 2018 Le Monde and continued on 4 full pages. What are the fines to each of the banks? How will European investors react to another theft by the banks?
  • fc
    frank c.
    21 October 2018 @ 15:56
    yawn...
  • KB
    Keith B.
    20 October 2018 @ 19:25
    What’s up with the dizzying, try hard editing? Could you please keep camera angle still and/or make it audio only?
  • RF
    Ricardo F.
    18 October 2018 @ 01:26
    Great!!! Maybe next year. Thank You!
  • OC
    Otto C.
    16 October 2018 @ 04:34
    I am surprised that he is recommending banks at the end of business cycle. There is something wrong with the banks, given that they are underperforming with increasing interest rates.
  • MP
    Mark P.
    16 October 2018 @ 02:15
    Aural Ambien
  • GF
    Gordon F.
    16 October 2018 @ 01:14
    PLEASE PLEASE PLEASE!!! I have asked multiple times. PLEASE voice over the questions so we can HEAR them. There is some great content in these presentations, but the video is JUST A TALKING HEAD. There is no advantage to watching it versus listening to it EXCEPT the questions are only flashed on the screen for a few seconds. Trying to figure out what the question was from what the speaker then says is a terrible distraction, and often makes me lose the train of what they are trying to convey. You have multiple talented people on your staff who could do the voice-over of the questions, so the additional investment of time or money would be negligible, and it would make these presentations much more useful and friendly. Or am I missing something? Is there some over-riding reason that the questions must not be spoken?
    • DR
      David R.
      16 October 2018 @ 18:21
      15 thumbs up. And probably many times that many agree who aren't reading your comment to vote. Like those who LISTEN to content while in the gym or commute, etc. Needs to be addressed as a top priority, or so it seems per the subs. TY.
    • JV
      James V.
      21 October 2018 @ 12:50
      ...or simply, just have the speaker recite the question as in a live Q and A. Problem solved.
  • CT
    Christopher T.
    16 October 2018 @ 00:10
    whats that saying about "hated" ideas ?
  • CT
    Christopher T.
    15 October 2018 @ 23:52
    why so many thumbs down?
  • DS
    David S.
    15 October 2018 @ 23:41
    Mr. del Missier may be smart enough, knowledgeable enough, experienced enough, and quick enough to find value in European banks. I am not. There is a large migration of black swans heading toward Europe and European banks. Normally a black swan event is unknown, but with a migration some swans will surely land. Love Europe but investing in European banks is way above my pay grade. DLS
  • SS
    Steven S.
    15 October 2018 @ 18:37
    The NY Federal Reserve is supposed to monitor big banks. But when Carmen Segarra was hired, what she witnessed inside the Fed was so alarming that she got a tiny recorder and started secretly taping.....hey Real News Real Vision - let's get Carmen on RV ---->A-SAP<------.....no more cheerleaders. Cleanup mode apparently needs to be pushed! . ed-u-cate yourself here: https://nypost.com/2018/10/11/whistleblowers-new-book-shares-secret-tapes-of-new-goldman-ceo/ https://www.thisamericanlife.org/536/the-secret-recordings-of-carmen-segarra
  • DR
    David R.
    15 October 2018 @ 17:20
    Why would I invest a cent in Europe until the EU decides to dissolve or unite? It's not like there are any discounts to be found currently. Italy could implode if not dealt with properly. I patiently standby to see more development. Populism in Europe appears far from over. Europes debt is insanely overvalued.
    • DR
      David R.
      15 October 2018 @ 23:47
      Ditto that populism in US is far from over, and US corp debt is insanely overvalued, plus total US gov't debt towers over European debt as does the insanely massive US twin deficits (at least Europe has a net surplus). US running the largest current account and budget deficits in human history, even proportionately, which is destined to be a total unmitigated disaster that will be studied for thousands of years when the US blows up and quickly sinks into economic oblivion and mass abject poverty. The USD will be the relief valve (essentially losing another 98% of its value, very quickly), and as bearish as USD has been for two years (down against the vast majority of currencies since the start of 2017, and already starting the next tailspin down as USD is bearish against most everything since Aug 15 with a horrid technical outlook). USD puked 20% last year and is setting up to puke twice that in its next wave down, inevitably on the technical charts. Actually, USD has been in chronic decline since 1985 albeit not linearly. Hilarious how every macro guy is long the Weak Dollar, just like they were 2 years ago before taking a 20-25% haircut, massive for a so-called reserve currency (which will no longer be the case within a few short years). Really a great setup when they're all on the same side of the boat - just like they were in Dec 2016 (and WRONG!!). Long EURUSD since 1.143 recently, like taking candy from a baby!!
  • SS
    Steven S.
    15 October 2018 @ 16:54
    I'll just leave this interview from Dr. Mark Skidmore here.....$21 Trillion “Missing” Money Huge Implications for Dollar.....time to Wake Up??? https://www.youtube.com/watch?v=H4XRbcBz2Z4
  • oo
    olga o.
    15 October 2018 @ 16:10
    Like the topic a lot, but wish Jerry talked in greater detail. I find that it is a little too general and superficial, particularly with Italy and DB - use of the term 'cleansing' is not descriptive enough for different issues in Europe. Also light on fintech. I liked the AT1 section the most.
    • DS
      David S.
      15 October 2018 @ 23:48
      Olga O. - I agree with you. The problems are so complex, a video on one topic or one bank would be more meaningful. DLS
  • NG
    Nick G.
    15 October 2018 @ 16:08
    Makes perfect sense that once the ECB stops its QE and corporate spreads widen out again, together with a steeper yield curve, that EU banks can start the process of rebuilding their profitability. So far, so obvious. The real question is how far this is reflected in the market already. I fear the bump up will be less than spectacular, but a certain amount of bullish impetus should be seen from the banking sector.
    • DS
      David S.
      15 October 2018 @ 23:57
      This does not make perfect sense to me. IMHO there will be blood in the streets before anything restorative happens. I hope investors in European banks, and for that matter many American banks the best of luck. I am not looking for stagflation, just stagnation. DLS
  • YB
    Yvan B.
    15 October 2018 @ 11:30
    That was an interesting topic, however I personally think he could have given more details about some investment ideas (Risk reward on AT1s for instance vs. equities with some specific names). He also could have explained a bit more why DB stock price is down 47% since the end of last year while the STOXX 600 Euro Banks is down 26%.. Even though European banks currently offers good value, it looks like leading economic indicators are showing a slowdown in the European economic activity.. With a low global liquidity (as Michael Howell presented in his latest video), a potential slowdown in economic activity and elevated uncertainty, how much premium do Euro banks really offer?