Deep Dive: Financial sector set to benefit from a non-zero interest rate environment

End of the European banks’ ‘ice age’

Eve Maddock-Jones
clock • 4 min read

The end of quantitative easing and the return of interest rates has been a catalyst for investing in financials, with traditional banks benefiting “almost immediately”.

Speaking to Investment Week, Sebastiano Pirro, chief investment officer, Algebris Investments, said banks had been "under construction" for the past 15 years following the Global Financial Crisis, and the focus on rebuilding balance sheets and reducing risks had been "generally good for credit investors, but not so much of the equity investor". He said: "If that was not bad enough for the beleaguered shareholder, central banks cut interest rates to negative levels or zero, which eviscerated banks' revenue from half of their balance sheet, i.e., their deposits." Deep Dive: Bond manager...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now


Already an Investment Week


More on Markets

Tiffany Wilding, (pictured) managing director and economist at PIMCO

PIMCO's Tiffany Wilding: Lessons from a year of unexpected economic resilience

'Risk of a downturn in 2024 remains high'

Tiffany Wilding
clock 06 December 2023 • 3 min read
Market Movers Blog: UK 10-year gilt yield drops below 4% for first time since May

Market Movers Blog: UK 10-year gilt yield drops below 4% for first time since May

Latest news and analysis

Investment Week
clock 06 December 2023 • 1 min read
Partner Insight: The dash for cash

Partner Insight: The dash for cash

Today’s investors face a challenging prospect of an oncoming recession and elevated market volatility, which may lead them to question their risk appetite and asset allocation. Against this backdrop, Fidelity’s fixed income team highlight the reasons why now is a good time to be allocating to cash in your investment portfolio.

Fidelity International
clock 06 December 2023 • 2 min read