On December 28, 2018, it was reported that the Euro Stock Bank Index was 34% lower than it had been at the beginning of 2018. The USA Bank Stock Index in 2018 had a decline of 23%.
European banks today, as a whole, are selling for about 40% below their book value. Some European banks’ stocks are now trading at almost 60% lower than they were in January of 2018. This reflects the European bank’s lack of profitability because of holding too many bad loans, etc.
As a result, a very small economic bump could create massive problems in the European banking system and therefore their economy. Japan has showed the world that if your banks are zombies, your economy is stagnant. Europe is in serious economic trouble with a welfare program bloated by illegal immigrants, weak banks, and an unstable regional governmental structure.
Because the Euro zone is such a large economic block, economic turmoil there ripples around the globe.