European banks have cleaned up their balance sheets since the start of the … – Yahoo Finance Spain

MADRID, 26 (EUROPA PRESS)

The European banking industry has managed to clean up their balance sheets and adjust them more liquid six years after the start of the crisis, but has yet to finish adjust to the new regulatory requirements, the report ‘That shrinking feeling: tracing the changing shape of the European Banking Industry’., prepared by PwC

The study, which analyzes the evolution of the size of the European banking and compares it to the big global banks from the analysis of the accounts of 33 EU banks (17), Australia, Canada, Japan and the United States between 2009 and 2013, shows that large European banks have reduced their assets by 3%, from 1097-1064 billions of euros in this period of time.

In addition, these entities have capital ratios at the same level as the major global banks have substantially reduced their exposure to risk. Thus, their risk assets over total has fallen from 36.9% to 34.6%.

“In short, they have focused on minimizing its dependence on more volatile assets and those have chosen back to basics. increase the number of customers and deposits, which grew by 14.5% between 2009 and 2013, “says PwC

The experts who prepared the report highlights that entities European financial “are now more liquid,” so they are in a “better” position when facing a possible financial crisis.

INCREASE IN CASH

Since 2009, have increased 78% cash, liquid assets have increased from 9.2% to 11.6% and reduced its short-term debt by 38%. In fact, at the end of 2014 long-term debt of European banks exceeded 200 million euros in short-term debt, when, at the beginning of the crisis, the situation was the opposite.

However, PwC warns that major European banks still have to adjust to the new regulatory requirements as a result of the implementation of the European Banking Union and the new single supervision. Among them, the report cites the additional cushion of capital to absorb losses –conocido by the acronym TLAC–, with which they will have to meet the major global banks deemed systemic.

In addition TLAC , regulators have yet to close “very important” when it comes to managing the balance sheets of financial institutions and their business models regulatory developments. Investors and analysts are convinced that, in practice, the required capital for European banks will not be 3%, but end up placing between 4% and 4.5%.

The PwC partner in charge of auditing in the banking sector, Alejandro Esnal, said that “European banks have made a great effort in a very short time, has a stronger balance sheets and sanitized before the crisis and is in a better position to take advantage of business opportunities that will recover as the economy recovers EU “

.