The market clearly doesn't know. ... In tightening its lending conditions, Lex notes, the ECB seems to be adjusting its facility for the long haul, and this has once again spooked investors:The ECB seems determined to make banks share a greater proportion of the pain they have inflicted on everybody else, and protect itself. If this view is shared by regulators, which may be emboldened to raise capital requirements significantly, tough times lie ahead for banks and their shareholders. The most recent bank rally may have been premature.So tangible regulatory risk can now be added to the toxic pile of downside risks facing the sector as whole.
...
In tightening its lending conditions, Lex notes, the ECB seems to be adjusting its facility for the long haul, and this has once again spooked investors:
The ECB seems determined to make banks share a greater proportion of the pain they have inflicted on everybody else, and protect itself. If this view is shared by regulators, which may be emboldened to raise capital requirements significantly, tough times lie ahead for banks and their shareholders. The most recent bank rally may have been premature.
Presumably the Central Bank of Carthage was equally pleased with the price stability that ensued after the Romans sacked the city and sowed the soil with salt.
