European banking crisis: Why your assets are not safe at your local bank
European banks are not profitable. Your cost-income ratio is 65%. When loans default, things get tight. Learn how to protect your money.
- How to understand the banking problem in europe and use it for your capital strategy
- How to understand critical metrics: the cost-income ratio and use it for your capital strategy
- How to understand how to protect your money and use it for your capital strategy
- How to understand related articles and use it for your capital strategy
The banking problem in Europe
European banks are not healthy. This is not dramaturgical - it is the mathematical truth that emerges from Huber's data (Figures 21 and 22).
The core problem:
- Negative Margen:The ECB key interest rates are below zero. Banks can't make more money
- Zombie-Kredite:Many companies don't pay their debts, but banks don't write them off
- Restrukturierungsrückstellungen:To a large extent, profits are just provisions for future losses
- Bilanzverlängerung:The ECB ties up balance sheets in bond purchases. Banks have less lending ability
Critical metrics: The cost-income ratio
One key figure shows the problem clearly: the cost-income ratio (CIR). It shows how many cents a bank has to spend to earn one euro.
What does that mean?German banks spend 65 cents to earn one euro. This is not sustainable. US banks have a CIR of 42%. This is the Americans' competitive advantage.
How to protect your money
1. Diversification of banks
Not all money is in one bank. Use:
- Mehrere Banken:Deposit insurance works per bank up to €100,000
- Online-Banken:Digital banks don’t have expensive branches and have better margins
- Nicht-Eurozone Banken:Swiss or Scandinavian banks are more stable
2. Alternative form of assets
Banks are not the only form of wealth:
- Gold and silver physical (do not store in the bank)
- Real Estate Ownership
- Shares in international companies
- Cryptocurrencies (as a small position)
3. Structural reallocation
Huber's thesis recommends: Shift 60% of your assets into tangible assets. No more relying on banks.
Daniel Huber, M.A. — Hochschule Mainz, 2020 | Betreut von Prof. Dr. Arno Peppmeier
13.174 Wörter · 92 Abbildungen · 39 Tabellen · Markowitz-Effizienzlinienanalyse
What you now know — and how to use it
- You know the core concepts and can apply them directly to your situation
- You know which mistakes to avoid — saving you time and capital
- You understand how this building block fits into your overall strategy
Sources & Further Reading
This article is based on a review of leading expert literature and curated primary sources from the CANVENA source matrix — more than 60 core books and 120 online resources across all relevant fields from capital intelligence, family office, strategy and valuation.
Books
- Lords of Finance — , Penguin Press.
- This Time Is Different — , Princeton University Press.
- The End of Alchemy — , W.W. Norton.
- Manias, Panics, and Crashes — , Wiley.
Online Resources & Industry Reports
- IMF Research — International Monetary Fund
- ECB Working Papers — European Central Bank
- BIS Publications — Bank for International Settlements
Links are recommendations, not affiliated.
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