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.
(0:00:04) - European Banking Confidence
(0:13:19) - The Risk of Bank Bailouts
(0:18:32) - Do Your Own Thinking
(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