EU Banks Would Benefit From US Interest-Rate Environment, Barclays CEO Says
January 22 2020 - 6:05AM
Dow Jones News
By Sabela Ojea
European central banks should start thinking about the
profitability of banks in the way the Federal Reserve does in the
U.S., Barclays PLC (BARC.LN) Chief Executive Jes Staley said in an
interview with CNBC at the World Economic Forum in Davos,
Switzerland on Wednesday.
"If you dropped the European banking industry in to the U.S.
interest-rate environment, you'd see quite an uptick in
profitability," the head of the British lender said.
When asked about whether it would be a good idea to cut rates,
Mr. Staley said markets are predicting some interest-rate cuts by
the European Central Bank, but that the effectiveness of even
looser monetary policy is losing its grip as interest rates get
closer to negative.
Mr. Staley said central banks have adopted a more accommodative
monetary policy like the U.S., "which is taking that and driving a
fiscal stimulus policy," and that he thinks other countries such as
the U.K. will begin to do that as well.
"That's providing a certain floor to the economy, which is
lending itself to more optimism in Davos this year than last year,"
Mr. Staley said.
However, the CEO said central banks are currently more focused
on stability in economies than the banks.
"At some point, central banks across Europe have to look at the
health, or lack thereof, of the European banking system," Mr.
Staley said.
Barclays's performance in 2019 was pivotal for the lender, and
the British bank was the third largest debt underwriter in the U.S.
last year, the CEO said.
Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix
(END) Dow Jones Newswires
January 22, 2020 05:50 ET (10:50 GMT)
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