“Many banks are unable to support economy – NU.nl

"Many banks are unable to support economy – NU.nl

This enables the International Monetary Fund (IMF) in a Wednesday presented report on the international financial sector.

According to the IMF, 70 percent of the banking sector in the euro zone unable to currently support the economy by giving priority to businesses. more credit They have indeed strengthened their buffers, but their profitability while seeing plummet. In order to provide more credit profit is up, but it is for many institutions the extent possible.

Recovery

Banks which are now declared healthy thanks to larger capital reserves are safe enough for a ‘normal life’, outlined IMF director José Viñals the situation. ‘But in many countries, banks’ athletes’ have to be that recovery can strongly support. “”

Because banks are still struggling with the new reality after the financial crisis, the role of other parties grown on the financial markets. This can be problematic because they can meet now than they promise. According to the IMF in crisis worse with their obligations

Meanwhile, the probability of a new financial crisis, grown according to the fund. In addition, the IMF notes the very low interest rates and other measures of central banks. Which are necessary to support the economy, but currently mainly lead to the “wrong risks.”

Soap bubbles

Instead of investment in production to hunt threatens cheap money especially ensuring bubbles in financial markets, where the hazards are underestimated.

For a better balance should be ‘unblocked’, the channels for lending Viñals said. Supervisors must thereby creating room for banks to not only their buffers, but also to strengthen their profitability.

He sees an important role for the Bank ECB research and subsequent supervision by the central bank. In addition, weak banks may be forced to withdraw from certain markets or cease their activities. Completely In this way, can arise for stronger institutions that remain.

a healthier market