Markets looked steadier ahead of the weekend, but looking a little deeper the seeds of further risk off are all about. My favorite comes from the Bank of England's latest policy statement:
" . . . the Committee remained concerned that capital was not yet at levels that would ensure resilience in the face of the prospective risks. It therefore agreed on the need for banks to continue to restrain cash distributions, including via share buybacks. But the scope to build capital through this route was limited. It therefore advised banks to raise external capital as early as feasible."
I wonder what the rest of Europe's central banking elite think of this? We've already seen moves by Uni Credit in Italy and many other big banks can't be far behind. I just wonder what type of discount boards are prepared to offer to get rid of their increasingly low return equity paper? On the basis that there's a price for every thing I'm sure Q2 will be all about discovering that level. May be that's the reason UBS moved on Italian "stud" banker Andrea Orcel yesterday? What do they know that we don't?