Double jeopardy for European banks

FRANKFURT: Emerging markets have long been rich sources of growth for European banks. But the higher interest rates and fat margins on offer in places like Turkey and Russia come at a price, as the last 48 hours have shown.

The latest round of US sanctions against those nations reverberated through European banks, whose shares tumbled last Friday. Potential defaults and weakening currencies hammered lenders including Spain’s Banco Bilbao Vizcaya Argentaria SA, Italy’s UniCredit SpA and Dutch-based ING Groep NV.