European banks defy environment

Trump's erratic tariff policy continues to cause considerable unrest on the financial markets. Although the European banking sector is not directly affected, the tariff issue is having an indirect impact here, too. On one hand, economic uncertainty is weakening growth, leading to lower demand for credit and rising loan defaults. At the same time, falling key interest rates are weighing on banks' interest margins. On the other hand, major European banks are benefiting from market volatility through higher trading income, while income from advisory and capital market activities is declining.