Even though bank balance sheets are on aggregate stronger than they were before the global financial crisis, a cyclical recovery wont solve the problem of weak bank profitability, according to the International Monetary Fund.
In its latest Global Financial Stability Report, the IMF says short-term risks have abated since its previous assessment in April but medium-term risks are building because of low economic growth and prolonged low interest rates.
Since the crisis, enhanced regulation and oversight have strengthened banks capital and liquidity buffers, making them safer, the Fund said. However, this new era of low growth and low rates threatens to undermine these gains.
In parti…
Read the full article at: http://ww2.cfo.com/banking-capital-markets/2016/10/imf-warns-weak-bank-profits-fueling-instability/
