By Steve Slater and Alex Chambers
LONDON, May 28 (Reuters) – This week’s market jitters that banks were heading back to the darkest days of 2008 look overdone because lenders have vastly improved their assets and central banks stand ready with abundant funding.
Bank of Spain’s bailout of a small regional bank has brought back the spectre of another systemic crash after the demise of Lehman Brothers in 2008, this time on concerns about the financial sector in the euro-zone’s periphery.
But the conclusion is too hasty, analysts said — and a recovery in markets since the middle of the week is confirming that view.
“We’re not back to the crisis days of 2008. The banks are not going into this period of turmoil with anything like the balance sheet structure they had two years ago, they are in much better shape,” said Simon Maughan, analyst at MF Global.
Not only have banks more capital and liquidity, there is also less economic stress. “We were heading into a recession in 2008, we’re heading out of one now,” Maughan added.