The banks in Europe have been coming under a lot of pressure as the coronavirus has halted all the important economies at the time when institutions are struggling still with the issues of the 2008 recession and the legacy which it left. The lenders in the region have been undergoing a huge transformation since the year 2008 by the increase of capital positions and have been complying with the tougher regulations. They have managed to nevertheless return to their market levels of before the crisis. The banks in Europe have been down by over 50% from the month of March of 2008 from the beginning of the year. The selling which had been virus fueled in the markets of the world means that the index is down by 70% now form the March of 2008.
The analysts have said that the banks had been fragile and vulnerable from all the debt and the financial crisis and now the coronavirus issue is delivering a major hit to the financial sector as the uncertainty of the investor has been compounded manifolds. The major issue in legacy from the levels of the crisis is the bad leans which include the loans here borrowers were in default. The figures of the EBA have shown that since the month of June in the year 2019, the ratio of the non-performing loans has decreased from the levels where it was in 2015 at 6% to now being 3%
The outbreak would now mean a lot of bad loans appearing in the balance sheets of the bank as there are many Small and medium sized organizations which have been closed and they will be facing a struggle for repaying their debts.