This follows a report released today by S&P in Frankfurt, entitled “The five key risks for European banks,” which analyzes the main risks to European banks.
S&P believes that “the extraordinary support they have provided governments, central banks and supranational institutions is the most important stabilizing factor at the moment for many of the credit ratings of S & P on European banks.”
Measures of central banks have offset the immediate liquidity risks facing the banking industry and have provided space for banking institutions to adapt to a rapidly changing operating environment, S&P.
The main risks for European banks are: the weakening of the creditworthiness of countries, the threat of an economic downturn, funding restrictions, the transition to more stringent legal requirements and the change of government support for banks.
S & P believes that a further decline in the solvency of some countries is likely to affect directly and indirectly to the rating of banks and trigger negative actions.
Instead, restore confidence and stabilize the country ratings may reduce pressure on the bank note.
It is more likely to deteriorate the credit quality of banks exposed to significant financial risk or institutions whose activities require a high leverage, funding and liquidity, as well as continued access to market financing.
“The measures taken by central banks are also evidence of structural weakness in large parts of the banking industry,” according to S&P.
Rescue operations of banking systems over the past years have increased budget deficits and reduced the ability of governments to provide more support in future crises.