Germany: Our financial system is stable and sound

BaFin and the Ministry of Finance have stated that the German financial system demonstrated “resilience” to shocks following the bailout of Credit Suisse.

BaFin is monitoring the latest market trends and incorporating them into their ongoing examination.

“The German financial system remains stable and sound,” the statement said. it was said.

The German Ministry of Finance also stated that the measures taken by the Swiss authorities and quick decisions were welcomed and noted that Germany’s financial system is stable. In the statement of the ministry spokesman, it was reported that German and European banking supervisory authorities are in close contact and closely monitoring the situation in the markets.

Biggest Concern

While there are signs that there are already significant losses in the financial institutions in Germany, it is stated that the losses are likely to get worse with each interest rate hike by the European Central Bank (ECB).

Marcel Fratzscher, Head of the German Institute for Economic Research, told Reuters that the Credit Suisse crisis and the SVB bankruptcy in California could affect the German economy.

Noting that financial crises, by definition, are almost unpredictable, Fratzscher said: “No one can rule out the possibility of a banking crisis at this point in time that will cause significant costs for growth and prosperity in Germany and Europe.” used the phrase.

Emphasizing that the systemic risks in the financial system have decreased significantly after the Lehman bankruptcy in September 2008, and that many financial institutions have more equity and security, Fratzscher said, “The biggest concern today is a panic between investors and savers. He doesn’t know he can get into trouble.” made its assessment.

Noting that the example of Credit Suisse clearly shows that even large, systemically important banks can be in a difficult situation, Fratzscher said: “Politicians must communicate difficult issues openly and honestly. On the one hand, they must address issues openly and honestly. On the other hand, do whatever is necessary to calm things down. must be convincingly reassured that they will do whatever it takes.” used the phrases.

Markets uneasy after bank failures

Switzerland’s largest bank UBS’s acquisition of Credit Suisse, which was in crisis, could not calm the markets.

It was noteworthy that the shares of German banks Deutsche Bank and Commerzbank were also declining today. Deutsche Bank’s shares, headquartered in Frankfurt, fell 8.5 percent and Commerzbank’s shares fell 6.5 percent at the opening today.

While the crisis of confidence in Swiss bank Credit Suisse created shock waves in the global financial markets, UBS announced that it would buy Credit Suisse for 3 billion francs. In the statement, it was stated that the purchase negotiations were initiated by the Swiss Ministry of Finance, the Swiss Financial Markets Regulatory Authority (FINMA) and the Swiss National Bank (SNB), and that the Swiss official institutions supported the purchase.