The accepted wisdom that European banking is an unmitigated basket case has become even more entrenched over the past year. While most banks in the region traded well below book value a year ago, since then their shares have fallen by about a third, and despite a brief rally early in early 2019, they have since fallen back to roughly the level of late 2018.
It is easy to see why.
Negative central bank interest rates bring the fundamentals of banking into question and erode the time value of money.
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