Euro banks telling same story as U.S. firms
TEXT OF STORY
Rebecca Singer: All this week, banks in Europe are reporting how well their business is doing. And on the whole, it’s a similar story to the United States. And while the rest of the economy staggers on, the financial institutions seem to be staging a stronger recovery. The BBC’s Rebecca Singer checks it out for Marketplace.
Rebecca Singer: They’re the types of losses we’d got used to hearing from the banks. But $2 [billion], $3 [billion] and even $11 billion are the profits some of Europe’s biggest banks have racked up in the past six months.
Peter McNamara has worked in key positions at some of the U.K.’s biggest banks:
Peter McNamara: Banks tend to do well when the economy is growing. So seeing the banks going on the other side is some indication of that recovery underway.
But there’s another side to the story. Unemployment in Europe and the U.S. is still high, and governments are pressuring banks to loan money to small businesses to help them grow. Eric Daniels is chief executive of Lloyds Banking Group, which is 41 percent owned by the British taxpayer. He says money is available; it’s just that demand from small business owners isn’t there.
Eric Daniels You don’t see a lot of expansion and therefore you don’t see a lot of financing needs. Many of our customers are very prudent and they are, in fact, drawing down debt.
But some analyst believes that a recovery is only possible if banks pump money back into the economy.
In London, I’m the BBC’s Rebecca Singer for Marketplace.
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