Will Deutsche Bank be the new Credit Suisse? Are the European banks affected by the bankruptcy of the major Swiss bank? That was the question of many at the summit meeting of the EU heads of state and government after the share price of Deutsche Bank temporarily collapsed by more than 14 percent on Friday. The titles of other European financial institutions also lost significantly in value.
German Chancellor Olaf Scholz (SPD) tried to calm things down: “Deutsche Bank has fundamentally modernized its activities. You don’t have to worry about anything.” In general, Europe has done its homework. Scholz: “It was worth it that we have issued very strict rules in recent years. The banking system is stable.”
Credit Suisse is also a special case for French President Emmanuel Macron. “One of Credit Suisse’s problems has been its reconciliation with certain US assets.” The European banks, on the other hand, would be in a different situation and would have a “sound foundation”. What is currently going on in the financial markets is the work of speculators who want to make money quickly, Macron said of the stock market turbulence.
Germany is on the brakes
Prime Minister Mark Rutte also pointed out the differences between banks in the eurozone and the situation in the US and Credit Suisse. In their joint final statement, the 27 Heads of State or Government of the EU wrote: “Our banking sector is resilient and the capital and liquidity situation is good”.
In fact, since the 2008 financial crisis, the EU has tightened its requirements for banks and created the so-called “banking union”. In that context, a common pot of billions has been set up so that no more taxpayer money has to be used to bail out a bank in the future. However, the system has never experienced an emergency with the failure of a major bank.
However, to complete the banking union as planned, there is still no European insurance for bank deposits. This is currently blocked. This is partly because Germany refuses to pool risks and to guarantee the deposits of bank customers in other EU countries in the event of an emergency.
Soource :Watson
I am Amelia James, a passionate journalist with a deep-rooted interest in current affairs. I have more than five years of experience in the media industry, working both as an author and editor for 24 Instant News. My main focus lies in international news, particularly regional conflicts and political issues around the world.
