Banks led European shares higher on Monday ahead of this week's key earnings data which will show their progress on writing down losses related to US subprime mortgages, while the dollar edged away from a 1-1/2 week low.Weekend news that the British government is to nationalize Northern Rock , which fell victim last year to a jump in interbank lending rates as a result of the credit crisis, has also helped sentiment among British banks.This week's earnings results from scandal-hit French bank Societe Generale , peer BNP Paribas , gaining some support from firmer stocks and recouping some of the losses made on Friday after data showed US consumer sentiment fell to a 16-year low.Investors expect the Federal Reserve to cut interest rates by 50 basis points in March, adding to the total of 225 bps of rate reduction since September -- moves which have depressed the dollar.
Banks lead European shares higher