global banks: Jon Cunliffe, who is responsible for financial stability at the BoE, said banks probably had more restructuring to do — especially in underperforming investment banking divisions — but that investors needed to lower their expectations too, according to Euro News. There is clearly at present a wide gap between banks’ disappointing returns on the one side and investors’ expectations on the other, Cunliffe said in a speech in London. Major global banks such as Citi and Goldman Sachs have reported sharp falls in profits in their latest earnings, and some British ones such as Royal Bank of Scotland
are in the midst of large-scale job cuts. Investors had the most pessimistic outlook on banks’ ability to increase the value of their assets since the 2011-12 euro zone crisis, he said, even though they were not so concerned about banks’ resilience as they were then. Global interest rates had fallen, and regulators did not allow banks to take the same risks as before, he said. Institutional investors who owned bank shares needed to accept that the types of returns of around 15 percent a year on equity that banks achieved before the financial crisis were no longer achievable, Cunliffe said. (news.financializer.com). As reported in the news. Tagged under global banks, BoE topics.