What to Watch for in 4Q U.S. Bank Results

The video discusses the price to book ratio of JP Morgan before and after the financial crisis, highlighting the changes in market leverage and capital composition. It examines the recovery of US banks post-crisis, noting their early capital increases and return to normal lending activities. In contrast, European banks face ongoing challenges, having adopted a slower recovery model similar to Japanese banks. The video also touches on the trading outlook and the importance of balance sheet repair for European banks.

What was one reason for the decline in JP Morgan's price-to-book ratio before the crisis?

• Decrease in tier one capital

• Higher leverage in the banking system

• Improved economic conditions

• Increased market confidence

What is the target price-to-book ratio for the best US banks post-crisis?

• 3.0

• 2.5

• 2.0

• 1.5

How did US banks primarily replace capital post-crisis?

• Government bailouts

• Mergers and acquisitions

• Retained earnings

• Issuing new shares

What strategy did European banks follow that was similar to Japanese banks?

• Retained earnings

• Aggressive early losses

• Wait and hope for improvement

• Issuing new shares

What is the main job of balance sheet repair equivalent to in terms of total assets?

• 12%

• 10%

• 7-8%

• 5%

Which region's banks are pulling back from trading areas?

• Asia

• Europe

• US

• UK

What evidence of recovery was seen in the UK in 2016?

• Increased securitization

• Improved lending

• Higher leverage

• Decreased capital