, Columnist
Europe’s Banks Think They’re Incredibly Safe
They see themselves as having the world’s least risky assets. Regulators don’t buy it.
Risk-free?
Photographer: Krisztian Bocsi/BloombergThis article is for subscribers only.
Given the parlous state of Europe’s economy, it’s hard to imagine that the investments of the region’s banks are among the safest in the world. Yet that is precisely what they would have regulators and investors believe.
The banks’ safety has come into the spotlight as European officials -- including German Finance Minister Wolfgang Schaeuble and European Commission financial-services chief Valdis Dombrovskis -- battle with global regulators over requirements for capital, the layer of loss-absorbing financing that prevents bad investments from turning into system-wide disasters.