At the European banking Congress in Frankfurt, the ECB chief is concerned about the future viability of the currency Union. However, he does not lose, but also the current monetary policy.
ECB President Mario Draghi holds the Option, from the loose monetary policy exit, is still somewhat open. We plan to finish the year at the end of the bond purchases, Draghi said at the “European Banking Congress” in Frankfurt.
However, this Option was, as well as a possible increase in interest rates after the summer of next year, depending on the economic development. He can see no reason why the Expansion in the Euro area abruptly ends. After such a long recovery, a gradual slowdown is normal. However, it should be otherwise, then the ECB will be prepared.
Side Blow In The Direction Of Rome
“Draghi has left open just a crack, the loose monetary policy to continue,” said Thomas Mayer, the founding Director of the Flossbach-von Storch Research Institute and former chief economist of the word of the German Bank. This way the President of the ECB was probably also in terms of two major risks.
Because whether it’s the Brexit will be sorted or is it hard, is still not clear. And for the second of the budget charged to the dispute between the Italian government with the EU Commission.
Italy the President of the ECB mentioned, but only indirectly. In order to protect households and businesses from rising interest rates, should increase the indebted countries of their debt, warned Draghi, and added: “And all countries should respect the rules of the community”. You must understand as a jab at the recent Comments of the populist Italian government.
How contagious the Italian disease?
Italy and the Brexit – the banks of a large topic. “You have to prepare always for the worst,” said Commerzbank chief Executive Martin Zielke. But with good risk management you could react to it, said Deutsche Bank head Christian Sewing.
His Confidence, he reasoned, the financial markets saw so far Italy as a single country with risks, so no danger of Contagion for other countries predicted. This is reflected in higher risk premiums for Italian government bonds – the investors show their concern, whether the repayment of these bonds may be at risk. “Not only the banks, the financial system as a whole has become more resilient”, said Sewing. “And we should always keep in mind and not everything is bad talk.”
The banks are Not afraid of the banks
In addition to these risks, Sewing and Zielke referred particularly to the challenges posed by new competitors. Since the banks are not only in competition with Fintechs, financial technology companies, in different areas of their value chain, for example in payment transactions, the life difficult for.
Larger problems could prepare the “Non-banks”, the big digital companies in the United States and Asia, warned Zielke and called for equal conditions for all: “If this is not done, could get the banking system in serious trouble.”
Good ideas here
The greatest danger threatening the banks if they were to product suppliers for these platforms – such as Google or Amazon, called Sewing. Therefore, we must have in Europe, even platforms.
But this could not be a Bank alone, but perhaps in Joint Ventures, community companies. “We should not think always only of consolidation, but a little more creative,” warned the head of the Deutsche Bank before focusing on the merger of banks such as the German Commerzbank, as Europe must move closer together.
The Mario Draghi – he pleads for a speedy completion of the banking and capital market Union. The best answer to the threats of the monetary Union: “More Europe.”