Sanford C. Bernstein revised its forecasts for the European capital markets banks, saying pricing pressure on assets beyond their fundamental value should abate, as the banks and brokers credit is now de-facto guaranteed by the central bank. Bernstein said it continues to believe that capital markets remain the superior form of managing and distributing risk and the investment banking industry should be able to continue to flourish. The brokerage prefers banks with a product mix geared towards flow and volatility driven products such as foreign exchange, rates and equity derivatives and who are underweight advisory and underwriting and cash equities.

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