Euro zone bank sector faces severe profitability shock

BRUSSELS: The euro zone banking sector is facing a severe profitability shock, European Central Bank chief economist Peter Praet said on Tuesday, pointing to high costs, an excessive amount of bad debt in some countries and the lack of necessary consolidation.

"We have in the sector a severe profitability shock," Praet told a conference in Brussels.

Praet said the sector would benefit from the formation of pan-European banking groups and the completion of the banking union.