France's 2nd largest bank announces profit warning European banking Outlook worries

Societe Generale, France's second-largest market bank, which has lost 4.9 billion euros in assets in the financial crisis and a 1.4 billion-dollar writedowns on its operations, recently unveiled a series of ripple effects that raised concerns about the future prospects for Europe's banks. The problem is that Société Générale's frustration is not a case in European banks. According to the ECB's report of 15th, the 16-country commercial banks in the euro zone could have write-downs of 283 billion euros in 2010. It is estimated that from 2007 to 2010, commercial banks in the region lost as much as € 649 billion, of which about 365 billion euros had been reported. The International Monetary Fund also believes the total crisis losses for eurozone banks could reach $904 billion trillion.　　Such a "report card" from European banks shows that "hopes of a rapid rebound are fading" to escape the shadow of the worst-hit areas of the financial crisis. European banks have become the hardest hit in the world financial crisis because of overinvestment in subprime mortgages and derivatives. As European banks pursue rapid profit growth and a convenient profit model, many European commercial banks and investment banks have been bullish on the development of U.S. real estate, actively involved in risky subprime derivative investments, and focused on developing risky investment banking. Under the favourable conditions of European monetary unification and financial integration policy, European banks expand their business in securities, insurance, investment, asset management and other fields. But when it comes to trouble, banks have to pay for huge losses; European banks have a high degree of internationalization, economies of scale and scope have increased market share and reduced profit costs, but neglected risk control, which has brought hidden worries to the development of the system. Regulators not only try not to intervene in banks to expand their business, but also to encourage financial innovation.　　This overly assertive approach to regulation has made European banks difficult to cope with in a crisis. The biggest challenge for Europe's banking sector now is the euro zone's debt, rising unemployment and a faltering economic recovery. This has led to a large number of business closures, marches and strikes, a rise in loan defaults, a steady increase in the number of bad debts by companies and consumers, and a rise in uncertainties, all of which have had a negative impact on European banking.　　The European Central Bank has warned that the European financial system is still at a high risk, and it is necessary to implement security warnings to banks to restore confidence in the banking system. The downturn in Europe has constrained the banking sector from its woes, and the poor state of banking has dragged the European economy back. Europe's banks want to jump out of this vicious circle, some experts believe that the first European banks need to carry out a big shuffle to ensure international competitiveness. Second, we should change the current business model, and repeat the skills of European retail banking products and private banking to ensure a steady increase in income and profitability. There is also the promotion of a more robust, more focused on the quality of basic assets of financial innovation, the quality of poor, riskier assets gradually stripped away, but also the European bankingA clear and crisp "blue sky". (Paris, January 18)