ECB Refused �To Answer Questions� � Deutsche Bank �Systemic Threat� Is �Not ECB Fault�
-- Published: Thursday, 29 September 2016 | Print | Comment
The potential collapse of Deutsche Bank and the systemic risk it poses to banks and the European financial and monetary system moved into the German political sphere yesterday. The German government denied it was preparing a rescue of the embattled bank and the Bundestag attempted to ask questions of ECB President Mario Draghi about the causes of the �systemic risks� posed by the bank.
Ralph Orlowski | Reuters ECB President Mario Draghi refused to answer questions in German parliament
The ECB president brazenly �refused to answer questions� regarding Deutsche Bank during a closed-door meeting in the German parliament. Afterwords in conversation with journalists, he denied that the negative interest rates being imposed by the ECB are partly responsible for Deutsche Bank and the German financial system�s troubles.
However, many analysts rightly assert that zero interest rate policies (ZIRP) and now negative interest rate policies (NIRP) are a factor and partly contributing to the challenges facing banks in much of the western world. Not to mention causing bubbles in many property markets and indeed in stock and bond markets.
�If a bank represents a systemic threat it cannot be because of low interest rates. It has to be for other reasons,� Mr Draghi asserted to reporters somewhat dogmatically and simplistically. He was contradicted by the head of Germany�s BdB banking association, Michael Kemmer, who told Deutschlandfunk radio that the ECB�s low interest rate policy was partly responsible for the current problems that Deutsche Bank and Commerzbank are facing.
This morning, Commerzbank, the second-biggest bank in Germany after Deutsche, suspended its dividend and revealed it is slashing more than 9,000 job losses as it too desperately tries to shore up its business in the face of ultra-low interest rates and increasing loan losses.
Anxiety over eurozone banks has risen since the market turmoil following the June UK vote to leave the EU. Until recently, however, concerns have focused on the bloc�s periphery, particularly banks in Italy.
Now the banking crisis is moving to the core. This poses the real risk of financial contagion in the European monetary system and the global banking system.
The content on this site is protected
by U.S. and international copyright laws and is the property of GoldSeek.com
and/or the providers of the content under license. By "content" we mean any
information, mode of expression, or other materials and services found on GoldSeek.com.
This includes editorials, news, our writings, graphics, and any and all other
features found on the site. Please contact
us for any further information.
Live GoldSeek Visitor Map | Disclaimer
The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy
or completeness of the information (including news, editorials, prices, statistics,
analyses and the like) provided through its service. Any copying, reproduction
and/or redistribution of any of the documents, data, content or materials contained
on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC,
is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be
liable to any person for any decision made or action taken in reliance upon
the information provided herein.