Why European fiscal union would make banks a 'buy'

Neptune's Rob Burnett is eyeing European banks for his equity portfolio as he believes the sector will be supported by full fiscal union - an option he thinks is becoming increasingly likely to rescue Europe from its debt crisis.

The manager of the £977m European Opportunities fund is not buying banks just yet, according to Douglas McDowell, head of client investment strategies, speaking on his behalf at the IQ Roadshow. However, he believes a bounce is on the cards for the sector before the end of Q1 2012 as they will be supported by authorities who will not allow them to fail. "He is not rushing out to buy the banks but we do not believe there will be an Armageddon. There is a real possibility over the next three to four months we could start buying," McDowell said. He added if fiscal union were to happe...