LONDON: European bank stocks fell on Friday after news of a trading loss of at least $2 billion at US powerhouse JPMorgan and as fears about the fallout on banks from debt crises in Greece and Spain rattled investors.

The STOXX Europe 600 banking index was down 1.7 per cent at 0725 GMT. Many banks were down nearly 2 per cent, including Barclays, Deutsche Bank, Santander and BNP Paribas.

Credit Agricole was the biggest faller, down 2.4 per cent, after quarterly profit fell 75 per cent when it took a 940 million euros ($1.22 billion) hit on its exposure to debt-laden Greece.

JP Morgan, long viewed as a strong risk manager, said its loss was from a failed hedging strategy.

Although the loss was specific to JPMorgan, it could have broader negative implications - raising the threat of further regulatory scrutiny and the difficulties of risk management, analysts said. J.P. Morgan chief executive Jamie Dimon has been an outspoken critic of too much regulation.

“This is a major embarrassment for JP Morgan Chase and for the industry at a time it is trying to fend off greater regulation,” said analysts at Mediobanca.

Spain, meanwhile, is due to unveil new reforms on Friday to complete the clean-up of its banks, demanding they set aside 35 billion euros more to cover loans in their real estate portfolios. Some critics say the plan does not go far enough to tackle its crisis.

More From This Section

Govt borrows Rs1 trillion in a month

The govt again went beyond its target to borrow through PIBs mounting debt close to Rs1 trillion in one month.

Licence auction fetches $1.12bn

The auction of 3G, 4G licences fetched $1.12bn, putting it very close to the expected $1.2bn target set by the govt.

Pakistan joins the 3G club

Zong wins 4G licence; Mobilink claims 10MHz band for 3G; Ufone, Telenor happy with 5MHz

WEF praises Pakistan’s innovation

WEF notes that Pakistan has ensured technology affordability to businesses and individual consumers.

Comments are closed.
Explore: Indian elections 2014
Explore: Indian elections 2014
How much do you know about Indian Elections?
How much do you know about Indian Elections?
From The Newspaper