European banks are more resilient to external shocks now – Moody’s

FXStreet (Mumbai) – European banks are better prepared to weather the impact of a potential Greek exit from the euro zone than they were at the height of the euro area crisis, while banks in other periphery countries remain vulnerable, Moody’s ratings agency noted.

Sean Marion, a managing director in Moody’s London-based banking team notes, “Broad improvement in euro area banks’ financial conditions and an associated stabilization in the region’s economic environment has made banks more resilient to external shocks than was the case during the height of the euro area crisis.”

The report also stated that the risk of restricted market liquidity, or “contagion”, is also lower than three years ago as “investor confidence has been bolstered by a gradual return to economic growth across the region and the increased number of tools euro area policymakers can deploy as an important backstop in the event banks’ access to market funding were disrupted”.

Marion added, “Banks in the periphery markets have strengthened their financial positions in recent years.”

European banks are better prepared to weather the impact of a potential Greek exit from the euro zone than they were at the height of the euro area crisis, while banks in other periphery countries remain vulnerable, Moody’s ratings agency noted.

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