Nerves were jangling hard in Europe last year, when the panic that had seen many tens of billions of dollars’ worth of deposits flee large US regional banks in a matter of hours suddenly began emerging in Europe.
European banks had enjoyed a resurgence in profits and net interest margins from rapidly rising rates without yet suffering from any rise in bad debts. But equity investors were still valuing many at substantial discounts to net asset value, implying considerable distrust.
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