Regulatory angst curbs investor appetite for European banks

Milan

UNCERTAINTY about the timing and scope of regulatory efforts to strengthen Europe's financial system is adding to investor caution about increasing exposure to European over US banks, even as the economy and earnings improve.

European bank stocks, overshadowed by some 800 billion euros (S$1.28 trillion) of soured loans from the financial crisis, rallied in the first half of the year after the election of French President Emmanuel Macron removed an element of political risk and data showed the region's economy recovering at a stronger- than-expected pace.