Rating agencies predict tough 2015 for European banks

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European banks face a tough year in 2015 as fresh and as-yet unfinished regulatory hurdles compound problems created by a stalling economic recovery, credit rating agencies Moody's and Standard & Poor's said on Monday.

Reuters reports that more than seven years after the start of the financial crisis, banks have made strides towards improving financial stability but they are still struggling to boost profits.

"The European banking industry remains structurally vulnerable," said Carola Schuler, managing director at Moody's, in a presentation on the sector's outlook, adding that lenders may need to cut costs and alter their business models to invigorate profitability.

The agencies said moves to reduce implied government support for the banking sector and force bank debt holders to participate by coming to the aid of wayward lenders would also put downward pressure on bank ratings.

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Europe's banks face tough year in 2015, ratings agencies say

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