Just not “too big to fail” – this is the lesson from the financial crisis. Now, the German policy wishes to be a Champion. Banking expert Thomas Hartmann-Wendels that is not useful.
Deutsche Welle: During the financial crisis, some banks had to be bailed out because they were too intertwined with big and too much in the financial system, as you can you could go bankrupt. Nevertheless, the policy will now have a national Champion in the German banking market, and therefore supports the merger of Deutsche Bank and Commerzbank. Germany needs such a Champion?
Thomas Hartmann-Wendels: For a strong economic power like Germany, especially for a very strong export-oriented Nation like Germany, it is important that there are also banks that can satisfy the needs of the economy. And given the tensions that exist in the international freight, trade wars, and so on, also grows the interest in this strong Bank should be a Bank with a home in Germany. On the other hand, we need not only a large Bank, we also need a powerful, strong and healthy Bank. Deutsche Bank and Commerzbank are the two banks that have struggled in the past with very strong problems. Slowly, they seem to have a bit of a foothold, but a merger of two such large and complex institutions is a huge task. The merged Bank will probably not be for many years to be particularly powerful.
Half a year ago, Deutsche Bank has said-in-chief, Christian Sewing, his Bank was only one to one and a half years, ready for such a large merger. Why the rush now?
The topic seems to be very strong by the policy has not been driven. Trust in international cooperation, in global free trade, even in the free exchange of financial services has fallen, and the economic policy puts more of an emphasis, again, on a national component. To create of therefore, this need here is a strong, German-based Bank. It overlooks, however, the dangers associated with it. Both banks are still not fixed properly and if the Whole thing should go wrong, carries at the end of the taxpayers, the load, because this combined Bank will, of course, be relevant to the system, that they can no longer be insolvent. In case of doubt the state would have to intervene.
Banking Expert Thomas Hartmann-Wendels
You just said it – the Commerzbank and Deutsche Bank are in the group tag. It would be better if the policy would improve the competitive situation of the domestic banks, rather than pressure on Deutsche Bank to exercise, in relation to a merger?
In Germany we have a very intense competition. Above all the savings banks and the cooperative banks that are very successful. This creates, of course, just for the two large banks significant problems. This competitive pressure is, however, also has a positive effect, it should not be reduced. This competitive pressure the large banks. Because competition is, perhaps, for the banks are not particularly pleasant, but for the customer it is a great advantage and you should not give up.
It is, when it comes to this merger, two the Lame do not make a Champion. Would it not be for the German Bank is not meaningful with a strong German Partner, for example, from Europe to go together?
Basically, it is always a Problem when two large banks merge. You can see that also in the case of Deutsche Bank and Postbank. The Acquisition is not digested till today. To bring the IT systems on top of each other to unify the processes, this is a huge expense. Basically, a strong European Partner would certainly be a sensible strategy. But I do not think that such can be found, because every Bank is afraid to participate in the Deutsche Bank or to. You don’t know what to buy. There are still many problems that remain unsolved. This is for a potential acquirer is not obvious.
Do you believe that there are meaningful Alternatives to a merger between the German Bank and Commerzbank?
In my opinion it would still be Best if both banks remain separated and try to bring their internal processes up to scratch to modernise your IT to be so powerful. For the Fusion of the imagination. There is no story connected with it – that you aim for here is a strategic objective, except to possibly save costs and close branches. But that is all no real strategy that inspires the imagination. In this respect, it would be from my point of view better, if both banks exist separately.
Thomas Hartmann-Wendels is a Professor for Bank business administration at the University of Cologne. The conversation Insa Wrede.