German Banking System a Growing Risk says ING

With the Italian banking system in the spotlight, analysts have highlighted that Germany’s lenders are still not out of the woods, saying shipping loans and too many bank branches are some of the very real problems they are currently facing.

German officials repeatedly tell EU members from the south of Europe to restructure their banking systems but industry experts believe they have a problem of their own as federal elections approach.



“Germany is overbanked, too many banks, very little consolidation has taken place,” Carsten Brzeski, chief economist at ING Germany, told CNBC via email on Wednesday.

There are approximately 2,400 separate banks with more than 45,000 branches throughout the country and over 700,000 employees, according to Commercial Banks Guide, an industry website.This increases the cost income ratio for banks, Brzeski explained. Meanwhile, the International Monetary Fund (IMF) warned last May that cost-to-income and leverage remain high in Germany.

via CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza