Europe’s Bank Earnings to Offer Glimpse Into Negative-Rate Abyss
- Firms have fewer options to fall back on as trading dries up
- Core lending businesses struggle with rates at zero or below
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If you thought U.S. bank earnings were worrisome, wait for the Europeans.
As top Wall Street banks warn of zero Treasury yields and falling income from lending, their European peers have been dealing with negative rates for half a decade, with an end looking increasingly far off. The drought has left them without a cushion to fall back on when income from trading dries up, as it did in the first half, and it’s one reason why once-mighty Deutsche Bank AG just announced the most radical cuts yet to its investment bank.