Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

European Banks Gain on Euro Region Direct Recapitalizatio

Don't Miss Out —
Follow us on:

June 29 (Bloomberg) -- European banking stocks surged on speculation an agreement by euro-area leaders that will allow banks to tap emergency money from the currency union’s rescue funds will stabilize financial markets.

The Bloomberg Europe Banks and Financial Services Index rose 3 percent at 10 a.m. Frankfurt time. Spanish banks led the increase, with Banco Bilbao Vizcaya Argentaria SA and Bankia SA jumping 6 percent and 3.5 percent, respectively.

The leaders of the 17 euro countries opened the door to recapitalizing banks with bailout funds rather than the rescue mechanisms of individual member states once Europe sets up a single banking supervisor. That may speed access to funds for troubled banks and improves the environment for their peers in more fiscally healthy nations, said Michael Seufert, an analyst at Norddeutsche Landesbank in Hanover, Germany.

“There’s a lot of relief that we’re moving toward a situation of stability for the financial sector,” said Seufert. “The probability that banks will get the aid they might need in a timely fashion is now higher.”

European leaders, who held 13 1/2 hours of talks ending at 4:30 a.m. in Brussels today, also dropped the requirement that governments get preferred creditor status on crisis loans to Spain’s blighted banks.

Today’s rally may only last for the short term, as “the agreement still doesn’t solve the euro area’s problems,” Seufert said.

To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.