What’s keeping the banks buoyant?

‘The central bankers have won,’ a senior City stockbroker said to me this week with an air of resignation. ‘There’s no point fighting them. Investors are doing as they’re told.’ And, wow, how they’re doing as they’re told. Thanks to central bank money-printing, cash is sloshing around the global financial system in desperate search of a decent return. There may still be little sign of a real economic recovery: China has slowed, to add to the misery in the eurozone. Yet the Standard & Poor’s 500 index of US stocks is at an all-time high and the FTSE 100 is within a whisker of breaking above its 14-year peak. Even Greek ten-year government bonds now yield a fraction over 8 per cent, remarkable when one considers that just a year ago, few people were willing to bet the country would at this stage still be in the euro.

UK bank stocks ought to be an ideal way to play this latest mania.