Regulation

Deutsche Bank CEO: Banking Reg Hurts X-Border M&A

Deutsche Bank’s Chief Executive Christian Sewing said on Wednesday (August 29) that the banking regulations in Europe remain fragmented, hurting the opportunity for international deals in Europe.

Speaking during a bank conference covered by The Financial Times, Sewing was quoted as saying: “The emergence of true European champions hinges on a unified regulation in Europe, a single financial market.”

The executive noted that the pressure for banks to consolidate via mergers and acquisitions is only going to increase. Sewing and Commerzbank’s Chief Executive Martin Zielke declined to comment on speculation that the two could combine, with Zielke saying at the conference that the company’s future success depends on being able to quickly change. “Size in itself is surely no differentiator,” he said.

During the presentation, Deutsche CEO Sewing argued that Europe doesn’t need lots of banks — Europe just needs strong banks. He noted that even as Deutsche restructures, it still aims to be a global corporate and investment bank.

“Under my leadership, this aspiration won’t be questioned,” he said.

With tensions increasing with the U.S., Sewing said Europe should not rely solely on non-European banks, highlighting the financial crisis 10 years ago.

“Back then, foreign banks cut their lending significantly more than domestic ones,” he said, warning that lawmakers and policymakers around the world aren’t in a good position today to fight a financial crisis like the one in 2008. “Problems were solved in a joint effort in a manner which is barely imaginable today,” he said, adding that this was a “grave concern” for him.

“In times of a nationalized economic policy, the world is much more vulnerable to shocks,” Sewing stated, adding that lawmakers have to take care to make sure they aren’t sacrificing global economic stability to further national interests.

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