Will ECB action on banks benefit small caps?

Market analysis

The results of the upcoming asset quality review could show that Europe's banks have truly cleaned up their act. This will mean good news for investors in small-cap shares, argues Wells Fargo's Brian Jacobsen.

Europe's economies have been fighting the same battle for the last six years. Each has been saddled with too many obligations, confronted with unpopular choices on taxes and spending, and are trying to rebuild the financial system. In that climate, how can the region’s economies grow? Progress has been made, even if incrementally, on many fronts. ECB impact on banks One area that looks to be changing for the better, aggressively so, is the banking system. This improvement could ultimately benefit many small-cap shares within the eurozone. In June, the European Central Bank (ECB)...