1. Could European Regulation Backfire? Georges Ugeux April 8, 2015

2. 2 Summary The Banking sector: a status quo The Central Banks, a question of assets’ stabilization Regulatory challenges STRICTLY PRIVATE AND CONFIDENTIAL

3. 3 Overbanked Europe The Banking Sector: a status quo Size of Banking Sector Loans and deposits in the EU The deposits in the US 1 2 3 4 STRICTLY PRIVATE AND CONFIDENTIAL

4. 4 European Bank Balance Sheets Show Regression Of Loans The Banking Sector: a status quo Size of Banking Sector Loans and deposits in the EU The deposits in the US 1 2 3 STRICTLY PRIVATE AND CONFIDENTIAL

5. 5 US Commercial Banks Balance Sheet The Banking Sector: a status quo Size of Banking Sector Loans and deposits in the EU The deposits in the US 1 2 3 STRICTLY PRIVATE AND CONFIDENTIAL

6. 6 Summary The Banking sector: a status quo The Central Banks, a question of assets’ stabilization Regulatory challenges STRICTLY PRIVATE AND CONFIDENTIAL

7. 7 The Central Banks, a question of assets’ stabilization Central Bank Assets as a Percentage of GDP

8. 8 Explosion of Central Bank Assets The Central Banks, a question of assets’ stabilization

9. 9 Fed and ECB Balance Sheet Projections: ECB’s assets keep increasing The Central Banks, a question of assets’ stabilization

10. 10 The Central Banks, a question of assets’ stabilization Highly rated debt is scarce as the ECB prepares to begin its 60 billion Euro monthly bond-purchase program

11. 11 G3: 10 - Year Government Bond Yields The Central Banks, a question of assets’ stabilization STRICTLY PRIVATE AND CONFIDENTIAL

12. 12 The European Quantitative Easing The Central Banks, a question of assets’ stabilization STRICTLY PRIVATE AND CONFIDENTIAL

13. 13 Summary The Banking sector: a status quo The Central Banks, a question of assets’ stabilization Regulatory challenges STRICTLY PRIVATE AND CONFIDENTIAL

14. 14 The Complexity of Decision Process Regulatory challenges STRICTLY PRIVATE AND CONFIDENTIAL

15. 15 The Complexity of Decision Process Regulatory challenges STRICTLY PRIVATE AND CONFIDENTIAL

16. 16 Lots of Regulations even for the Retail Banking Regulatory challenges STRICTLY PRIVATE AND CONFIDENTIAL

17. 17 TLAC pressure on universal banks Regulatory challenges STRICTLY PRIVATE AND CONFIDENTIAL

18. 18 As A Solution: The Co-Co Bonds Regulatory challenges STRICTLY PRIVATE AND CONFIDENTIAL

19. 19 A Specific Case: Greece Regulatory challenges STRICTLY PRIVATE AND CONFIDENTIAL

20. 20 STRICTLY PRIVATE AND CONFIDENTIAL Conclusion

21. 21 Thank You Galileo Global Advisors, LLC Ten Rockefeller Plaza, Suite 1001 New York, NY 10020 Phone: +1 212 332 6055 Fax: +1 212 332 6033 www.galileoadvisors.com Georges Ugeux Chairman & CEO +1 212.332.6044 gugeux@galileoadvisors.com Contact Information STRICTLY PRIVATE AND CONFIDENTIAL