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Global

After decades of rapid globalisation, national economies and financial systems are more closely connected than ever before. At the same time, open markets and free competition are increasingly under criticism and even restricted. A major part of the work of Deutsche Bank Research therefore focuses on how Europe fares in an international comparison, how changing structures and the regulatory framework influence the development of financial service providers, their clients and financial markets globally, and which opportunities and risks result from long-term megatrends such as climate change, demographic change, digitalisation and new forms of mobility.

131 (81-90)
November 25, 2014
It is fashionable to say Germany is heading down the path of post-bubble Japan. But what if the Japan to worry about is not the deflationary 1990s but the previous decade when golf club memberships swapped hands for millions of dollars? And just as there is a risk investors fail to apply the lessons of a rising sun to Germany, there is a danger that Japan’s post-bubble era is ignored by China and South Korea. [more]
84
October 9, 2014
Since its outbreak in December 2013 in Guinea, the Ebola epidemic in West Africa has resulted in over 3,000 deaths out of 7,000 cases, according to the World Health Organization. The actual figure could be higher since there is evidence of substantial under-reporting of cases and deaths. This outbreak has been spreading considerably faster than previous ones, mostly because it has reached urban areas in Liberia and Sierra Leone. It could spiral to over 500,000 infections, and potentially many more, by the end of January if control measures do not improve, according to the US Centers for Disease Control and Prevention. In contrast to this worst-case scenario, mobilisation by the international community as seen recently and increased education in affected countries could almost end the epidemic. [more]
85
July 31, 2014
The recently announced plans for a free trade agreement between China and the EU are momentous. China is the EU’s No. 1 supplier of goods and its third-largest export market. In turn, the EU is China’s largest trading partner. Going by current trends, EU-China annual bilateral trade could grow close to 1.5 times in a decade’s time. Not only goods but also services trade has large potential to grow. Chinese investment into the EU is still in its infancy but is likely to increase and become more broad-based, covering a wider range of industries and countries across Europe. New dynamism is expected from a bilateral investment agreement currently in negotiation and rising interest of Chinese investors in European companies, as shown by our compilation of Chinese M&A deals vis-à-vis the EU and Germany. Plenty of headroom exists for greater use of RMB in bilateral trade and investment relations. A note of caution concerns the risk of trade disputes which is unlikely to be removed in the near term. [more]
86
May 16, 2014
So far the West has chosen a reluctant approach in its attempt to contain Russia’s encroachment in Ukraine, refraining from economically or financially meaningful sanctions. The Ukraine crisis and further sanctions will not be inconsequential for the profile of the European recovery, but when looking at the distribution of costs, it seems that the West can afford to be tough towards Moscow. Obviously, the economic cost would be higher if Russian supply of energy to the West was jeopardized, but this would come at a very high price for Russia itself. [more]
87
February 18, 2014
Substantial changes in global economic weights over the past decades, in particular the rise of China and India, combined with major shifts on the energy supply side – the US shale revolution – have increasingly shifted the Gulf countries’ economic focus towards the Asian continent. Asia is now the GCC’s most important trade partner, both in terms of its hydrocarbon exports as well as imports of machinery, manufactured goods and food. The growing trade ties have also been accompanied by intensified bilateral investment relations. The observed shift promises to give the GCC countries better access to rapidly growing Asian retail markets, not only in energy but also other sectors such as telecommunications and Islamic finance. This should help the GCC in its ambition to diversify its economies. Migrant workers from Asia contribute significantly to economic prosperity and development in the Gulf monarchies, although the socio-economic implications stemming from the rapidly growing expatriate communities in the region will pose some challenges. [more]
88
January 31, 2014
Corporate bond markets in Asia have expanded rapidly. Since the global financial crisis, Asian corporates have made increasing use of bond issuance for their funding needs, complementing traditional channels such as bank lending. While the bond markets of Hong Kong, Singapore and Korea are comparatively advanced and liquid, markets in China, India, Indonesia and Thailand are still at an early stage of development. Considerable variation exists in terms of bond issuances' structural characteristics by sector, currency, issuing volume and the use of funds. Fast growth in bond markets has provided an effective source of financing for the corporate sector, but its development is far from complete. [more]
89
September 26, 2013
Five years after the global financial crisis hit both the US and Europe, banks across the Atlantic are in very different shapes. US banks have returned to record profit levels, while their European peers are struggling to stay above the zero line at all. The differences are mainly driven by diverging trends in revenues, corporate lending growth and loan loss provisions all of which have developed much more favourably in America than in Europe. This may have been caused largely by three underlying factors: i) the better macroeconomic performance of the US, ii) European banks' less aggressive dealing with problematic legacy assets and their greater need to deleverage and shrink, and iii) differences in the institutional setup - in Europe at times triggering doubts over the very survival of the Monetary Union, in the US allowing the Fed to massively intervene in financial markets. As the US economic recovery gains strength and Europe emerges from the debt crisis and recession, banks face improvements on an operating level, with EU financial institutions likely to narrow but not close the gap to their US competitors. [more]
90
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