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Finally, a payday for European bank investors

By Marc Rubinstein | Bloomberg

16 Feb 2023 · 3 min read

Editor's Note

Typically, the story is that European banks lag behind their U.S. peers—not so for the past three months. Author of the finance newsletter Net Interest, Marc Rubenstein, explores this reversal.

For more than a decade, one of the most reliable stories in global finance has been the lagging performance of European banks against their U.S. peers - in both earnings and investor returns. Lenders in Europe are still trading at 70% below their 2007 peak before the global financial crisis, a summit U.S. lenders reoccupied in 2018.

But things are looking up on the Old Continent. In the past three months, European banks have outperformed U.S. banks by 20% in dollar terms. There are two principal reasons why this may be more than a false dawn.

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