The banks are little bit breathless

With the upcoming autumn, I’m noticing how are more and more people around me coughing or sniffing. It would be expected that the transition from the temperature around 30 degrees Celsius to the temperature around zero will have consequence. Worse is that I’m starting to worry that the arrival of autumn will have problem to breath out the already breathless bank sector.

It is very well known that the zero interest rates of some central banks are long time suffocating the most important revenues of the majority of banks – interest revenues which are the income from loans. Many banks are trying to keep their profit so they started operations that they might regret in the future. We already know about the roasted Deutsche Bank, which overdid it with selling the mortgage-backed securities, with derivatives, manipulation with the LIBOR rate or with keeping the losses secret. Bank is threatened by fines from every side. The manager of the bank John Cryan still hasn’t come to the agreement with the American administration about lowering the 14 billion dollar fine, even though only a few days ago the financial world took the lower fine almost for granted.

Other big players in the bank world have problems as well. The American mortgage giant Wells Fargo is facing a lawsuit for 2.6 billion dollars. Their clients are demanding this sum because the employees were creating unauthorized accounts. Another problem is concerning American bank Morgan Stanley. It was accused of unethical sales contests and insufficient providing of the information. When we look at it from every angle, every single flagship of bank world is in trouble. Even if the bank houses manage to pay the fines the trust in banks in the USA and in Europe will be more and more shaken to its foundation.

We can see in Central Europe that the banks can bankrupt even in present time: Russian ERB bank is unable to meet its obligations and this news was confirmed by Czech national bank. Another bank is going bankrupt in the Czech Republic after 13 years…