Market 'Roller Coaster' To Continue Amid Euro-Zone Fears: Analyst

Until the market in general "feels calmer about the euro zone, this sort of roller coasterride is likely to go on for a while," John Raymond, senior analyst-European banks at CreditSights Limited, told CNBC Tuesday.


"The problem that [European] banks have, when people are looking at their capital positions, is exposure to other parts of the euro zone that we're still worried about" including Spain and Italy, said Raymond.

"What we need to calm that down is for politicians to say the right thing and make people feel better," he added.

However, Raymond noted that banking institutions look much more "manageable" should Greece default.

Take for example the embattled French bankBNP Paribas. It has "material exposure to Greece but it's not really as big as its exposure in Italy because it has commercial banking operations there, and also invests in the [Italian] sovereign debt," he explained.

Also, one of the issues with European banks has been "genuine lack of disclosure," but some banks, particularly Societe Generale, has done a lot to improve its risk management, Raymond went on to say.

Societe Generale needs "to be out there telling people about that on a regular basis, not just in response to rumors, but every quarter giving people updates on their position," stressed Raymond.

SocGen, whose shares have been punished in recent weeks amid the deepening sovereign debt crisis in Europe, said it was accelerating a strategic plan announced in June 2010 to cope with new realities, in which funding would be more scarce and more expensive for all banks.

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