With euro zone banks still enjoying the positive impact of low interest rates, overcapacity in the financial sector may be the key hurdle weighing on profitability, European Central Bank President Mario Draghi said on Thursday.
“Overcapacity in some national banking sectors, and the ensuing intensity of competition, exacerbates this squeeze on margins,” Draghi told a conference. “Such over-capacity also means the sector does not operate at the efficient frontier, which is one reason why cost-to-income ratios remain high in some countries.”
via Reuters
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Alfonso Esparza
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
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