All told, the ratio of household net worth to disposable income - a useful summary of the sector's financial position - recovered last year to stand at a level about equal to its average over the past decade.
We believe the correlation is monotonic: the sounder the state of public finances, the more confidence people have in that country’s banks, and vice versa. Europe’s policymakers have responded to this loss of confidence and have initiated a recapitalisation of major European banks.