Deep Dive: Banking worries add to already sour European small-cap outlook

Macroeconomics push European small caps

The ramifications of the biggest banking failure in 15 years, combined with the woes faced by Credit Suisse, have done nothing to help the already grey outlook for European small-caps in 2023.

While the US regional banking crisis is not directly a European issue, Peter Kraus, head of small cap equities at Berenberg Wealth Asset Management, argued that despite the size of these companies, they demonstrate the issues he has with banks and other comparable financial companies, which he described as "high risk investments". He said: "We do not invest in business models which are merely driven by external factors like interest rates or commodity prices, lacking structural growth drivers." Kraus explained: "The current development around Silicon Valley Bank and others has once ag...