The Coronavirus Disease (COVID-19) outbreak together with a significant oil price drop are creating loss of investor confidence and significant disruptions in the financial markets. The situation is rapidly evolving and while the full impact on European banks remains uncertain, it will clearly be negative.
- Pressure on net interest income is likely to continue
- The extent of the impact on delinquencies is uncertain, but impairment charges will increase
- Measures announced by central banks and governments provide some relief
- Market access for funding could become more challenging or expensive
- European banks are in a stronger position than 10 years ago
- Potential operational risk but technology and regulators support business continuity
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