Banking sector volatile ahead of stress test results
Banking shares were very volatile this afternoon ahead of the release, after the markets closed, of stress test results which have been carried out by the European Union. As it happens, there were no real issues with the results although there are some banking institutions which are "sailing very close to the wind". So what next?
Analysts have been awaiting the results of the European Union stress tests for some time and will have the opportunity to look in more detail over the weekend. However, even though the results were no worse than expected there are still many challenges ahead for the European banking arena where changes to regulations and taxes will continue to have an impact in the short to medium term. If, and this is a big if, recent regulatory proposals are actually put in place this will place major pressure upon the banking sector with a requirement to raise significant amounts of additional capital.
Whether investors, and the money markets, will be able to entertain these potentially enormous capital raising exercises remains to be seen but those who believe that the sector is "out of the woods" may well have to think again.
Share this..
Related stories
Government attack short sellers and then appoint Paul Myners
In a move which is again very brave or very foolish we have seen Gordon Brown bring in a new adviser to his government in the shape of Paul Myners. He has been appointed as City minister in the Lords and brings with him some very strong credentials and experience which very few in the industry could match. He has worked for Marks and Spencer, Guardian Media and Land Securities, so why the big de...
Read MoreIs Virgin Media struggling?
While there has been some concern about the high levels of debt with Richard Branson's Virgin Media operation, today's announcement of a refinancing should be well-received by investors considering the current economic climate. The company has been able to postpone repayment of £4.3 billion of debt until 2012 which gives it an extra three years to pay back the money. The group had been set to rep...
Read MoreCadbury shares push ahead to record high
Cadbury shares today arose by 17p to nearly £8.20 with speculation that Nestlé may be looking to enter the bidding war for the UK outfit. When you also consider that Ferrero, Hershey and Kraft Foods are also in the mix it would appear that the UK stock market believes that Cadbury's days as an independent outfit are most certainly numbered. However, there is still some way to go yet to appease...
Read MoreAre you making best use of the financial services industry?
While it is no secret that the financial services industry in the UK is one of the largest and strongest in the world, more and more people across the country appear to be ignoring the benefits of long-term financial planning and basically living on a day-to-day basis. However, it is imperative that all of us look towards the future, and especially retirement, and make sure that there are financia...
Read MoreUK government seeks to take control of Jaguar Land Rover
The UK government is this evening accused of trying to take over Jaguar Land Rover by the "back door". The authorities are demanding control of the day-to-day running of the business in exchange for securing an £800 million rescue package even though the business is currently owned by Tata of India. However, the government's demand for the right to choose the chairman, take a seat on the board an...
Read More