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
European banks: Is growth finally returning?
2014 is witnessing a remarkable reversal in some important European banking trends of the past few years, according to the 9-month results of the continent’s largest banks. This is not solely a positive thing: apart from improvements in core revenues and a return to balance sheet expansion, expense levels are also rising again. Is deleveraging and shrinking over, then? [more]
Global financial markets
SME financing in the euro area: New solutions to an old problem
SMEs’ access to finance remains a pressing problem in many parts of the euro area as SMEs largely rely on bank loans for funding. Our findings show that it is mainly the banks’ own refinancing costs in capital markets and their risk perceptions regarding SMEs which give rise to constraints. Of the steps taken to spur bank lending, the ECB’s LTROs seem to have had limited success. Securitisation of SME loans on the other hand has the potential to bridge the gap between SMEs’ funding needs and the availability of bank loans. Public-sector and market-based initiatives to improve SME financing are of great importance as well: for the former, private-sector involvement is crucial; as for the latter, overall success has been mixed so far. [more]
Corporate funding in Germany
Monitor Corporate funding in Germany
In Q3 2014, lending to German corporates and self-employed fell back into stagnation, even though the yoy comparison remained positive (+0.5%). Most export-oriented industries saw a setback; however, many industries that rely more on the domestic economy recorded an increase in loan volumes. Growth differentials between banking groups shrank further, while interest rate levels once more slid to new all-time lows. The German economy returned to growth in Q3 (GDP +0.1% qoq) thanks to a significant rise in consumption and a positive development of net exports. By contrast, fixed investments – which were weak again – and a substantial shrinking of inventories contributed negatively to growth (available only in German). [more]
Chart in focus
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]
Spotlight on Germany
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