Even though the banks still stand by their recommendations to sell stocks, investor confidence has rebounded. So far this year the sector has gained 16% and many individual banks are trading above book value. This scenario has not played out since the sovereign debt crisis stalled the entire European economy.
Without doubt, the banks are moving toward their new normal, which clearly shows that they will not need to raise more capital provisions. Still, their work is not done. The banks need to revive their traditional business model: loaning money to companies and families. Until they start issuing cash dividends, we should not even think about saying the word "recovery."
