Finance
European shares slip as banks slide on Trump's credit card fee cap plan
Published by Global Banking and Finance Review
Posted on January 12, 2026
European Stocks Decline as Banking Sector Reacts to Trump's Fee Proposal
Impact of Trump's Credit Card Fee Cap on European Markets
Jan 12 (Reuters) - European shares dipped on Monday as tensions between the U.S. administration and Federal Reserve Chair Jerome Powell turned global markets cautious, and President Donald Trump's call for a one-year cap on credit card interest rates weighed on banks.
Banking Sector Performance
The pan-European STOXX 600 slipped 0.2% by 0807 GMT. Banks were the biggest drag on the index, dropping 1.1%.
Investor Reactions and Safe-Haven Assets
Barclays fell 4.5%, hitting its lowest in nearly a month, and HSBC dropped about 1%.
Other Market Movements
On Friday, Trump called for a one-year cap on credit card interest rates at 10%, starting on January 20, but did not provide details.
Investors also fled to safe-haven assets after Trump's officials threatened to indict Powell over comments to Congress about a building renovation project. Powell said it was an attempt to influence interest rates.
Meanwhile, AstraZeneca dropped nearly 1% after losing its spot in the Nasdaq-100 index.
French biotech Abivax surged 22.8%. In an interview with Bloomberg News, Abivax CEO Marc de Garidel said major pharmaceutical companies cannot ignore the potential of his company's experimental inflammatory bowel disease drug.
(Reporting by Niket Nishant in Bengaluru; Editing by Janane Venkatraman)
Frequently Asked Questions about European shares slip as banks slide on Trump's credit card fee cap plan
1What is a credit card fee cap?
A credit card fee cap is a limit set on the interest rates or fees that can be charged on credit card balances, aimed at protecting consumers from excessive charges.
2What are European stocks?
European stocks refer to shares of companies that are listed on stock exchanges in Europe, representing ownership in those companies and their potential for profit.
3What is the banking sector?
The banking sector encompasses all financial institutions that provide banking services, including accepting deposits, making loans, and offering investment products.
4What are interest rates?
Interest rates are the percentage charged on borrowed money or paid on savings, influencing economic activity and consumer behavior.
5What is economic growth?
Economic growth is the increase in the production of goods and services in an economy over a period, often measured by the rise in GDP.
