And according to the FDIC, the leverage ratios of the biggest European banks, calculated according to the same accounting standards, are very close to their American peers.6 Since mid last year in particular, European banks have implemented write-offs and increased provisions and capital, partly anticipating the Comprehensive balance-sheet Assessment that the ECB is conducting this year.
As a result, confidence in the euro area banking sector is now starting to rise. This development has been recognised by the stock market where banks’ share prices increased by 41% in 2013, above market average growth of 20%.7 Nevertheless, the task of bringing back confidence in the EU banking sector is still underway.