The long road ahead
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The long road ahead

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Banks in Europe face a bleak choice. They can redouble cost cutting and capture the move to digital. They can also top up capital with AT1s, for which there is still a bid. But as the acute phase of the crisis now approaches and loan losses rise, banks’ fabled capital strength faces a stern test

October in the European capital markets began with CaixaBank offering €750 million in perpetual, non-cumulative, contingent convertible additional tier-1 (AT1) preferred securities.

The bank wanted to optimize its capital structure and strengthen its leverage ratio.

With investors still pondering the implications of its cost-cutting merger with Bankia, this was a test of their appetite amid continuing uncertainty over the losses that large Spanish banks – and other European lenders – will eventually suffer from the deep Covid recession.


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Editorial director
Peter Lee is editorial director. He joined Euromoney straight from Oxford University in 1985, and has written about banking and capital markets ever since, being appointed editor in 1999. He became editorial director of Euromoney in May 2005.
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