Financial industry
The Deutsche Bank and the decline of a Guild
Shares of Deutsche Bank and Credit Suisse will no longer be listed in the prestigious Stoxx Europe 50 Index. The entire industry will soon be unnecessary?
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Out throw – Deutsche Bank flies from Prestige-Index
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Out throw – Deutsche Bank flies from Prestige-Index
Maybe the one or other remembers the days when bankers were called bankers? In the case of transactions you put a lot of value on good personal contacts and not only on good quarterly balance sheets. A handshake was as good as a contract. At the time, the banker ranked in the prestige scale directly according to the University Professor and the chief physician on the front seats of prestige in the Public. And Deutsche Bank was a respected, almost sacred Institution.
Until that occurred, what has been called the “TIME Online” once as “Bank robbery from the inside”. The began 27 years ago, in 1989, when the Board bought out then-chief Alfred Herrhausen, the British investment Bank Morgan green fur. Suddenly hundreds of financial experts and traders populated the company, and the began, the character of the Bank, a complete turn around.
From a solid institution, the earned money in order to lend to the economy, was a gambling joint, the more and more securities transactions made on its own account. Ten years later, in 1999, bought the Deutsche Bank, the American investment Bank Bankers Trust, and thus increased temporarily, the largest Bank in the world. Meanwhile: at the same time, the gamblers, the investment bankers have won completely the upper hand.
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Bank robbery from the inside
In contrast to the Board, you are not responsible for your transactions, you’re taking higher risks and rake in billions of bonuses – estimated 40 to 50 billion euros within a period of 15 years. Profits has introduced the risky investment banking the bottom line is that barely – on the contrary. Deutsche Bank has slipped in Ranking from the top to a place somewhere in the 40s ranks, the exchange rate has fallen within a year, to 66 percent from 33 to eleven euros, valuable industry investments sold Bank robbery from the inside.
But above all, the investment banker changed the corporate culture of the Frankfurt money house, the once conservative, but seriously, that came along in the past few years, but is becoming more and more a gang of robber barons recalled. The world will be brought against Deutsche Bank over 7,000 processes, it comes to money laundering, interest rate manipulation, tax evasion. For the financing of costs of the German Bank currently holds € 5.4 billion. In the past year, billion-dollar provisions for litigation, had a record loss of 6.8 billion euros.
Preliminary Low Point
For the preliminary low point in the Reputation of the house, chief John Cryan and chief financial officer Marcus Schenck with the announcement made in the spring of the management Board, Deutsche Bank was able to pay the interest for very risky bonds. Who must show something to the public, usually just before the revelation. The pension funds and investors, based on a long-term value development, separate from the shares of the German Bank, the rating Agency Moody’s downgrades the Frankfurt money house, only two levels from junk Status removed, which, in turn, the cost of refinancing.
However, Also other European banks, it seems to go better. On Tuesday afternoon, after the stress test weekend, Bank title had to leave in the whole of Europe springs: The Italian major Bank Unicredit’s German subsidiary company, Hypo-Vereinsbank, has lost 7.2 per cent, followed by the two major Spanish banks, Santander (minus 5.3 percent) and BBVA (minus 4.9 percent), as well as Dutch ING Group (minus 4.6 percent), belongs to the German ING Diba.
The unprecedented decline of
Many banks in Europe are still suffering the consequences of the Finenzkrise. You still have billions of a complaint from bad loans in the books, the burden is still on the balance sheets. The recent stress test has also shown that many European banks still have a very tight Eirgenkapitalsdecke, including Deutsche Bank and Commerzbank. And: All the institutions have been suffering from a persistent earnings weakness in the environment of low interest rates, which will remain due to the Brexit probably low as well.
The loss of importance of the major European banks is now also one of the most important stock market barometer for the continent: The Deutsche Bank and the major Swiss Bank Credit Suisse will no longer be led today in the Stoxx Europe 50, in which the main stock market values in Europe are United. The Index is not respected quite as much as the Euro Stoxx 50, which only combines values from the Euro area. However, the step for the two once-proud houses is the same as relegation from the first League of European corporations.
And the future of the European banks don’t look rosy. Thomas Mayer, former chief economist Deutsche Bank and now a Professor at the University of Witten/Herdeke, predicted already a year ago, the “demise of the traditional banks”. His fear: of Technical progress, which threaten low-interest-rate policy of the Central banks and government regulation to destroy the existing business model of the banks.
Dangers for the future
The low-interest-rate policy, as Mayer argues, is squeezing the margins in the traditional banking business, “and the longer this low interest rate phase lasts, the more banks will have to give up your business”. In the same direction is the increasing government regulatory acts, according to Mayer. “The Supplement capital for systemically important banks and the obligation to make the settlement in the event of insolvency, without recourse to taxpayers’ money, it is possible the model of the global universal Bank, seem obsolete.
The greatest enemy of the banks, the technical progress is, however, Mayer said. Because of the could cause banks to lose payment and credit intermediation to other companies. Payments “are likely to, in future, be increasingly conducted through electronic payment system, in which companies in the information industry have technological advantages.” And also the classic lending business could come under the wheels: “The emergence of the Crowd Funding shows that we can organize where to sociable companies, savers and investors together.”