* European stocks up 1.4%,
* Crude futures still under pressure
* Wall Street rises at the open
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"I’M FROM THE GOVERNMENT, AND I’M HERE TO HELP" (1348 GMT)
There was a time Ronald Reagan was cheered when he said the most terrifying words in the English language are "I’m from the government, and I’m here to help".
But in the brave new world shaped by the coronavirus pandemic, capitalism icons such as Thatcherism and the Chicago boys are irrelevant, argues Sam Theodore, managing director at Scope.
The state is back in the driving seat and has taken an unequivocal lead in the fight against the pandemic and the financial catastrophe it has unleashed on the global economy.
Not only governments are currently indispensable in preventing an economic and financial collapse but they most certainly keep occupying the centre stage for the foreseeable future.
In that sense, Theodore believes investors in banks should quickly understand that paradigm change.
"What the banks are being asked to do now is to distribute public-sector financing, provide temporary financial relief to their clients who need it while continuing to stand on their feet", he writes in a note.
In that sense, "the European banking sector moving into this new direction, in-between market dynamics and a quasi-public mission, will probably require investors and analysts to adjust their assessment lenses".
The recent decision of most European banks to freeze or scrap dividend payouts has indeed already forced investors to manage their expectations towards a sector which has lost about 40% of its market value in a quarter or so.
"The banks will need to re-balance their strategic priorities away from first and foremost meeting bottom line-related shareholder expectations", Scope&aposs Theodore also said.