Current Valuations of European Banks Unsustainable: RBS's Davies

The video discusses the valuation of European banks, highlighting their low valuation compared to tangible net assets and the implications for capital raising and lending. It questions the ECB's decision to not normalize interest rates and explores the nervousness about Europe's economic prospects. The discussion extends to market clearing in Europe, the historical development of European capital markets, and the impact of financial crises. Challenges in the European banking union, such as the lack of a deposit insurance scheme, are highlighted as obstacles to a genuine European financial market. The video concludes with a discussion on cross-border banking and the need for a capital markets union.

What are the implications of European banks being valued below tangible net assets?

Why might the ECB be more nervous about the economic prospects in Europe than the figures suggest?

What role did the financial crisis play in the development of a genuine European capital market?

What are the challenges faced by the ECB in implementing a Deposit Insurance scheme?

How does the lack of a genuine European financial market affect cross-border lending?