Mar 21, 2023
In this thought-provoking episode, we dive deep into the
challenges facing the European banking sector with expert guest
Joachim Klement, CFA, an investment strategist at Liberum. We
tackle the recent confidence breakdown in the industry, the
potential risks of bank bailouts, and the impact on bond markets,
while also reflecting on Joe's experience in the financial industry
and his valuable advice to "do your own thinking. " Don't miss this
insightful and timely discussion as we navigate the complex world
of European banking and uncover the critical differences between
now and the 2008 financial crisis.
Chapters:
(0:00:04) - European Banking Confidence
(0:13:19) - The Risk of Bank Bailouts
(0:18:32) - Do Your Own Thinking
Chapter Summaries:
(0:00:04) - European Banking Confidence (13 Minutes)
In this episode, we explore the current challenges in the European
banking sector with Joachim Klement, CFA, an investment strategist
at Liberum. We discuss the recent confidence breakdown in the
banking industry, starting with Silicon Valley Bank's bankruptcy,
and how it affected other banks like First Republic Bank and Credit
Suisse. Joachim also shares his insights on the UBS and Credit
Suisse deal and the potential impacts of the current turmoil on
various sectors. He emphasizes the importance of investing in
companies with positive free cash flows and highlights the
differences between the current situation and the 2008 financial
crisis.
(0:13:19) - The Risk of Bank Bailouts (5 Minutes)
In this portion of the episode, we examine the risk of a liquidity
crisis due to a potential bank run in Europe and the impact on bond
markets. We also discuss the divergence in expectations between the
US and European central banks, highlighting the potential
consequences of cutting interest rates too soon. Furthermore, we
touch on the unintended consequences of bank bailouts and the
possibility of future regulation akin to the Dodd–Frank Act.
(0:18:32) - Do Your Own Thinking (1 Minutes)
As we wrap up our conversation with Joachim Klement, CFA, we
reflect on his first job in the financial industry as an investment
consultant for UBS. Joe shares his top piece of advice for his
younger self: do your own thinking. He emphasizes the importance of
forming one's own opinions rather than simply adopting the views of
others, as this can lead to defending positions one may not
genuinely believe in.
Listen for free and browse our back catalog of Guiding Assets
episodes: https://link.chtbl.com/guidingassets