Calling on banks: Dombret: mergers may not be a taboo – n-tv.de NEWS

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 Monday, May 18, 2015

 
 
 

 
 The German banks are to present their business models to the test. The calls Andreas Dombret, Director of banking and financial supervision of the German Bundesbank. He also warned against a too strong mixing of politics.
 

 
 

The Board for banking and financial supervision of the Deutsche Bundesbank, Andreas Dombret, has called on the German financial institutions, “to put to the test” their business models. The often high dependence on interest income burden profitability, Dombret said. Although the banks have benefited from the good state of the German economy; “Without question” there but “when it comes to profitability, a significant need to catch up”.

Dombret hit the banks, on the revenue side “to develop alternative sources of income” or to increase their fee income. On the cost side could, for example, the “still very large branch networks to be a starting point in order to save costs.” . Even mergers should not be a taboo, as long as together would find strong partners

Well prepared for severe shocks

With regard to capital ratios, Dombret sees the German banks well equipped: Even before the stress test European Central Bank (ECB) in the past year they had their own capital “significantly strengthened”, the Bundesbank board member said. All major German banks possessed enough capital in order to “survive severe economic shock” one too.

Dombret welcomed the active since November single European banking supervision of the ECB. “National different supervisory practices and requirements, it will no longer exist in the large, directly supervised by the ECB banks,” he said. This was one of the “great advantages of European Banking Supervisors”.

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For the national supervisory authorities monitor the approximately 3,400 smaller European banks, called Dombret ” enough room “to meet the special circumstances of justice institutions. Background are common prudential standards that the ECB is currently developing with the national authorities. “A reasonable proportionality in the supervision of the smaller institutions must be guaranteed – for this, the Bundesbank will use emphatically” Dombret said

With regard to the influence of politics on banks Dombret said this was “in principle. not in the sense of a market economy “. Experience had shown that the state is not the better banker. After the financial crisis, in which the boundaries are blurred between government and banks, for example, public support for faltering banks, it is now important to create new structures. In future it must be allowed to fail and large banks, “without endangering the entire financial system.” But the sector is already “progressed big piece, but certainly not yet reached the goal” at both global and European level.

  Source: n-tv.de
 

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