Banking, Financial Markets and Regulation
Like the regulatory framework, the structure of the international financial markets influences the development of financial service providers and economies. Scenarios for the future development of the global financial market, and the related opportunities and risks, are a major part of the work of Deutsche Bank Research.
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European banking markets
Talking point
Euro area money market funds: turning the corner?
Euro area money market funds have returned to growth, according to the latest ECB data. By March 2015, they managed EUR 1,032 bn in assets, up by EUR 120 bn from a year earlier. A similar surge in assets was last seen before the financial crisis, which marked the beginning of a prolonged decline. Amazingly, the upward trend in assets occurred while money market yields hit record lows, especially for the euro. So what is really behind MMF asset growth? [more]
Global financial markets
Deposit guarantee reform in Europe: A systemic perspective
The financial crisis has led to substantial reforms of the system of financial regulation and supervision in Europe – not limited to but including deposit guarantee schemes (DGSs), which play a key role in consumer protection and financial stability. The most recent DGS reform follows a gradual approach, i.e. focuses on adapting existing national systems rather than replacing them. Nevertheless, new rules for bank resolution and the emerging Banking Union are considerably changing the environment DGSs operate in. Given the complexity of the new setup, cooperation between the different players in the financial safety net – including DGSs – is indispensable. [more]
Corporate funding in Germany
Monitor Corporate funding in Germany
In Q1 2015, lending to German corporates and self-employed bounced back (+0.8% qoq). Loans to the manufacturing industry recovered some lost ground, while lending to the services sector and self-employed remained robust. Convergence among banking groups continued, except for the Landesbanks. With regard to financing alternatives, both bond and equity issuance disappointed. The German economy grew less than expected in Q1 (GDP +0.3% qoq), but underlying dynamics remain solid. Domestic demand – and particularly private consumption – was the sole growth driver. Higher investments only compensated for a decline in inventories. The GDP forecast for 2015 has been lowered to 1.6% (available only in German). [more]
Global financial markets
Money market funds – an economic perspective: Matching short-term investment and funding needs
Money market funds are important financial players in Europe and the US, offering investors capital preservation and daily liquidity on the one hand, while providing short-term funding in money markets on the other. However, the European and US markets differ in their structures and economic functions: In Europe, where the market is split into two distinct segments, MMFs’ balance sheets reflect to a large degree intermediation within the financial sector and a strong investment focus on bank debt. In the US, by contrast, a homogeneous set of industry standards exists and MMFs’ business is geared more towards direct intermediation between non-financial sectors. [more]
Germany
Clients with a migrant background: The role of risk preferences in retail banking
Clients with a migrant background are growing in importance as a target demographic for retail banking. In collaboration with Bayreuth University we have carried out an empirical analysis of risk attitudes in this customer group using data supplied by the German Socio-Economic Panel (SOEP). Our findings allow implications to be drawn for bespoke advisory services for clients with a migrant background. In effect, banks will be able to raise the quality of their financial advice to the customer's benefit – and tap into a key growth market at the same time. [more]
Spotlight on Germany
 
 
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