Too Soon to Celebrate for Europe's Banks

by Francesco Guerrera

Wall Street Journal
January 28, 2013

Show me that glass again? Definitely half full. You look great, by the way. Have you lost weight?

Forgive me if I sound uncharacteristically chirpy, but I am writing this column on the plane back from the annual meeting of the World Economic Forum, whose theme was "Returning Optimism." OK, maybe not quite. The official leitmotif of the Davos jamboree was actually "Resilient Dynamism," but the participants' mood was more in tune with my title.

After years worrying themselves sick about the future of the euro zone, the stuttering U.S. recovery and a potentially fraught leadership transition in China, the self-styled "global elite" concluded that the world in 2013 looks better than in 2012 and 2011.

The rosy tint was nowhere more apparent than in the Davos-thinking about battered European banks. The financial cognoscenti were uttering phrases like "the beginning of the end" and "the worst is over," while bank executives pointed to their companies' resilient dynamism, to coin a phrase, in the face of adversity.

"The trust in the euro and the European banking sector has come back," proclaimed the head of a large European lender.

I wouldn't pop the champagne, spumante and cava just yet.

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