BNP Paribas, Societe Generale… our banks threatened by the impact of the coronavirus?

As the coronavirus pandemic spreads, our banks are struggling … and their ratings may soon be lowered by rating agencies. With the confinement of a growing number of countries in Europe, economic activity is logically under pressure. In this regard, INSEE announced that activity in France had plunged 35%. This of course has a major impact on the banking sector, although the authorities are taking steps to mitigate the consequences.

As for the outlook for our banks, “it all depends on the length of the period of disruption of the coronavirus and the degree of reaction of governments”, judge Justin Bisseker, analyst European banks at the management company Schroders. “We have seen a myriad of government responses announced across Europe: tax deferrals, debt moratoria, credit guarantees, etc. to mitigate the effects of the crisis. We have also seen central banks lower interest rates, lowering the cost of short-term borrowing, “said the expert. Some banks are better placed than others to overcome this crisis, which poses “clearly high” risks, but he considers it unlikely that a sector rescue plan will be imposed on shareholders.

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Will credit dry up in Europe?

The current crisis will bring its share of bankruptcies, despite state support measures. For our banks, the losses on loans granted will increase. While many European governments have launched guarantee systems deemed essential to avoid a credit crunch, these systems “will not fully offset the impact of the crisis on credit losses. Typically, the bank covers about 20% of the losses and the state about 80%, ”reports Justin Bisseker, who adds

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The incredible number of applications received to work in the fields
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“data-reactid =” 25 “>The incredible number of applications received to work in the fields
Call to strike in public services: “untimely” notice for the government
Job seekers will have to update themselves remotely from Saturday
Are we going to run out of pasta? Panzani’s boss answers
This interactive map shows which store is open during containment