Cost of equity is the new answer to banks’ low profits

A merger of UniCredit and Commerzbank would be the biggest bank M&A deal since the 2008 crisis. It is about the riskiest thing you could imagine a chief executive choosing to do. So how would it square with UniCredit CEO Jean Pierre Mustier’s insistence that his share price can rise, because he can do more to convince investors his bank is safer than before?

If you discount, for a moment, the idea that UniCredit might bid for Commerzbank, you can see where Mustier is coming from.