Why Investors Have an Aversion to Europe's Finance Firms

The video discusses the challenges facing European financials, including Brexit, financial regulation, and the specific issues with Deutsche Bank. It highlights the impact of regulatory measures and stress tests on European banks, which have not recovered as well as their US counterparts. The video also covers Deutsche Bank's legal challenges and the broader implications of low and negative interest rates on banks' profitability and growth prospects.

What are some of the main concerns affecting European financials?

• Brexit and financial regulation

• High interest rates

• Strong economic growth

• Increased bank profitability

Why do European financials face a valuation discount compared to other markets?

• Higher profitability

• Stronger economic recovery

• Regulatory challenges and lower returns on equity

• Increased investor confidence

What is the theoretical cost of equity for a bank, according to finance theory?

• 20%

• 10%

• 5%

• 15%

What is a significant challenge for Deutsche Bank as discussed in the video?

• Strong market position

• Excessive profitability

• Legal fees and potential fines

• High interest rates

What is causing a rethink of low interest rate policies?

• High inflation rates

• Backlash from financial leaders

• Strong economic growth

• Increased bank profits