Asia lukewarm on European banking asset sell-off

A combination of market and regulatory pressures is forcing European banks to deleverage their balance sheets and offload some of their asset portfolios, creating a potential opportunity for Asian financial institutions. But do they want to take it?

European banks have been counting the cost of the prolonged eurozone crisis. With large exposures to Greek sovereign debt, highly leveraged positions and a reliance on US dollar funding, they are being forced rapidly to shrink their balance sheets and look to exit non-core capital-intensive businesses.

In addition to the negative market outlook, European banks also face higher regulatory capital levels: the last months of 2011 saw them preparing for the imposition of new trading book rules