Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Barclays and Deutsche lead bank rally as capital rules softened

Barclays and Deutsche lead bank rally as capital rules softened

Banks across Europe rose hard yesterday as the Basel Committee overseeing new rules on leverage and capital adequacy watered down a key leverage ratio.

‘The revised definition includes a number of important concessions for banks,’ said Deutsche Bank analyst Jim Reid.

The decision, agreed on Sunday by central bankers meeting in Switzerland, will particularly benefit investment banks with large fixed income books.

Deutsche Bank rose almost 5% on the news while Barclays rose by more than 3%, closely followed by Royal Bank of Scotland. Barclays is now trading at a six-month high while Deutsche Bank stands at a near two-year high.

The STOXX 600 Banking index rose more than 1% to its highest point since May 2011.

The decision to remove cash collateral against trades from the basket of assets which must be balanced by bank equity will put the European institutions on a more level playing field with the US.

Both Deutsche and Barclays had scrambled over the second half of 2013 to bring their balance sheets into compliance with the rule, and would have had to reduce their trading books had they not been able to do so.   

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Potential US rate rise, cheap oil & the Europe opportunity

Potential US rate rise, cheap oil & the Europe opportunity

This week we analyse the implications of a possible rise in US interest rates, the impact of cheap oil and the European equity opportunity.  

Play Carmignac's Crowl: what QE could mean for Europe

Carmignac's Crowl: what QE could mean for Europe

The ECB is widely expected to finally fire its QE gun this week. Carmignac's Sandra Crowl discusses the implications for the eurozone.

Play Grexit worries, currency wars and a grizzly outlook for 2015?

Grexit worries, currency wars and a grizzly outlook for 2015?

The first Investment Pulse of the year looks at the potential impact of Greece leaving the euro, volatility in currency markets and the UK’s economic prospects.

Your Business: Cover Star Club

Profile: DIY investing is biggest threat to industry, says Whitechurch

Profile: DIY investing is biggest threat to industry, says Whitechurch

The industry is at risk of pushing potential investors down the DIY route unless it does more to make its services accessible says the Whitechurch Securities boss

Wealth Manager on Twitter