Large bank M&A across Europe is now inevitable

As credit losses hit banks hard over the next three quarters, one large failure could spark a systemic crisis. Consolidation is the only way out.

Euromoney asks the chief executive of one large European bank for an outlook on the economy, likely credit losses and potential mitigants.

He expects the European economy to contract maybe 8% in 2020 – although his own economists are regularly updating their estimates in one worrying direction. The worst quarter will be the second, but social distancing will continue to hurt many businesses into the third and fourth quarters of 2020.

He hopes for a recovery starting in the first quarter of 2021.

Credit losses will be large over the next three quarters.