A hidden tailwind for banks

The banks face a number of headwinds, but there is strong evidence the credit cycle has turned and is accelerating.

I noted back in early 2013 that you couldn’t call a bank bubble at the bottom of the cycle. Recall at that time there was a view that banks were expensive and couldn’t run higher – UBS investment bank, in particular, had the view that banks were in bubble territory.

It’s been over a year since that call was made and, in that time, our bank stocks pushed up between 11% and 19% at the high. It’s fair to say that there’s been some retracement since.



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