More than half of the worlds banks are already in a weak position before any downturn that may be coming, according to a report from consultancy McKinsey & Co.
A majority of banks globally may not be economically viable because their returns on equity arent keeping pace with costs, McKinsey said in its annual review of the industry released Monday. It urged firms to take steps such as developing technology, farming out operations and bulking up through mergers ahead of a potential economic slowdown.
Most of these banks are in the eurozone. Germany for example has at least a dozen very weak banks. They can't make a profit thanks to the eurozone's negative interest rates.
Negative interest rates are at their lowest in the eurozone and in Denmark at -0.5% an. In Japan it's -0.1%.
If your country has positive interest rates, the banks are likely safe and profitable. It's the negative interest rate zones that are a problem.