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Ultra-low interest rates: How Japanese banks have coped

June 10, 2013
This study reviews how Japanese banks have responded to the adverse macroeconomic environment during the past ten to twenty years. The experience of Japanese banks provides some valuable insights into the effect of a prolonged phase of low interest rates on bank balance sheets and profitability. Banks have adapted both the cost and income drivers of their business. Profitability and efficiency gains have been limited though. While Japanese banks have reduced their bad loan problem, they have also become increasingly exposed to their home sovereign. [more]

More documents contained in "Germany Monitor"

102 Documents
July 13, 2020
Region:
1
In 2019, net migration to Germany amounted to +327,100, a significant decrease compared to the previous years. Particularly striking is the sharp decline in immigration from Poland and the sharp increase in the number of immigrants from India. In 2020, immigration is likely to collapse due to the COVID-19 crisis. Subsequently, we expect higher number again. The migration over the coming years might be driven by the skilled worker immigration law which came into force in March 2020. Also, the very good epidemiological situation in Germany compared with many other countries might be a pull factor. If net migration then returns to more than 300,000 people per year, the population is likely to rise from 83.2 million today to over 84 million by the early 2030s. [more]
May 5, 2020
Region:
2
The corona crisis is currently overshadowing all other aspects of the German property market. On the assumption of a strong recovery in the second half of the year structural issues will return to the foreground and the pandemic will slow down, but not bring an end to the German property cycle. In this report we look into both the negative effects of the crisis and fundamental factors and assess the outcome for the German house and office market. A flight to safety and the potential increased immigration could have a positive impact in the medium term. [more]
May 5, 2020
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Analyst:
3
Due to the coronavirus, production in the manufacturing sector in Germany is expected to fall by roughly 10% to 15% in real terms in 2020. Society and business will learn to live with the coronavirus and weigh up health, social and economic risks in the process. In 2021, industrial production could rise by more than 10% in real terms on average over the course of the year. However, overall we see a risk that Germany may become less attractive as an industrial location over the coming years. Policymakers and industrial companies are likely to view the crisis surrounding the coronavirus as an opportunity to make important political decisions and get structural reforms off the ground, as they should. [more]
April 3, 2020
Region:
4
Due to the COVID-19 pandemic, uncertainties about the future development of German real estate prices have increased considerably. A global flight to safety should drive prices for residential properties up. In the short-run, the downturn in economic activity, particularly during the first half of 2020, and considerable uncertainty about the future as well as the psychological burden are likely to result in price declines. [more]
February 27, 2020
Region:
5
The key message: If the Berlin rent cap is constitutional, the situation for investors will change dramatically. The realignment of housing policy in Berlin and the rent cap represent a radical attempt to sideline market-based mechanisms. We believe the economic supercycle in Berlin will continue undiminished and Berlin remains an attractive market for long-term oriented investors. The negative effects of the rent cap on the housing market are likely to emerge clearly in the long run. [more]
January 9, 2020
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Analyst:
6
The shift towards alternative propulsion technologies, such as e-mobility, is currently the biggest challenge for the global auto industry. So far, this structural change is driven mainly by government regulation and not so much by market forces. At the moment, electric vehicles only have significant market shares if they are heavily subsidised. While e-cars can help to reduce carbon emissions in the EU, the favourable climate effect will be smaller than many supporters of electric mobility expect. A higher market share of e-cars will lead to manageable job losses in the German auto industry; however, local factors are key for value added. [more]
November 21, 2019
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Analyst:
7
As German policymakers plan to do without nuclear power, coal and lignite in the future, natural gas remains the last traditional source for power generation. And since Germany targets complete climate neutrality by 2050, natural gas will also be a transitional source of energy – nothing more and nothing less. The completion and operation of Nord Stream II is clearly in line with the declared goals of German energy policy. Nord Stream II will improve supply security and pipeline gas, such as that delivered by Nord Stream II, is more environmentally friendly than LNG. [more]
March 14, 2019
Region:
8
The house price cycle in Germany should remain in place in 2019. But we expect much more divergence across regions and a heavily increasing complexity of causal impact channels. Led by immigration and the continuous labour market uptrend, house prices and rents will likely continue to rise. The risk of overvaluations and a full-blown price bubble in the German housing market is rising. However, the price uptrend is likely to continue for years to come, in Germany as a whole and in most major cities. In this report we look at the housing markets in Munich, Berlin, Frankfurt, Hamburg, Düsseldorf, Stuttgart and Leipzig and we comment on the German office market. [more]
February 12, 2019
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Analyst:
9
Robo-advice is a new breed in asset management. Robos’ assets under management have been growing quickly in Germany. However, the market is increasingly becoming concentrated and competitive. Robo portfolios have shown relatively robust performance recently. Yet the high costs of robo-advice in Germany are a drag on returns and may alienate potential customers. Current clients, meanwhile, are mostly middle-age, higher-income men rather than millennials. [more]
January 30, 2019
Region:
Analyst:
10
During the current cyclical upswing, which started in 2010, German manufacturing companies have increased their real gross capital expenditure by just above 3% p.a. In 2017, the industry accounted for 51% of total other capital spending (intellectual property) in Germany. This shows that manufacturing is the most important driver of research and development and thus of technical progress. The automotive and the pharmaceutical industries stand out from other sectors. The capital stock in energy-intensive industries has been shrinking for years now – a trend that gives cause for concern. While the German manufacturing industry is faced with long-term challenges, we believe that it is nevertheless sufficiently adaptable to remain competitive on a global scale. [more]
November 8, 2018
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Analyst:
11
With digitalisation becoming an ever more common feature along the value chain, the German industry looks set to enjoy higher potential growth in the coming years. The additional gross value added in German manufacturing might total EUR 70–140 bn for the years between 2018 and 2025. As a rule, the industrial sector is in a better position than numerous (personal) services sectors to benefit from the favourable impact of digitalisation. Traditional capital goods producers, such as the auto industry or mechanical and electrical engineering, are likely to see their gross value creation benefit more strongly from digitalisation than the metals or chemicals sector. [more]
September 14, 2018
Region:
12
Since the last corporate tax overhaul in 2008, the need for reform has been continuously building in Germany. Given the ongoing criticism of Germany's current account surpluses, a reduction in corporate taxes would be a strong signal to provide new impulses to the sluggish domestic investment activity, thereby addressing a key issue of the current account discussion. The international trend towards lower tax rates also needs to be addressed, if Germany is to retain its competitiveness as a site for investment, innovation and jobs. [more]
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