Savings banks and cooperative banks at risk: Germany is facing a banking crisis

the Due to the economic crisis, high level of loan defaults threaten banks, warn researchers. The endangered banks have to award a maximum of almost 630 mil

Savings banks and cooperative banks at risk: Germany is facing a banking crisis
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  • Due to the economic crisis, high level of loan defaults threaten banks, warn researchers.
  • The endangered banks have to award a maximum of almost 630 million euros in loans. Part of it could be at risk.
  • in Front of all the people, banks and savings banks are at risk because they have lent money to many small firms are particularly affected by the crisis.
  • number of national banks has been fading for years because of the consolidation pressure already.

Germany as a financial location is on the ground: While the banks and financial service providers on the peak of the Corona-crisis were able to keep up and there has been no default in payment traffic, is rolling now, a wave of bankruptcies on the credit institutions, which could drag even a heavy toll. This is the result of a recent study conducted by the Leibniz-Institute for economic research in Halle (IWH).

such A wave is true of the financial service providers, which are anyway in a bad shape: The payment service provider, Wirecard is insolvent, and his case presents the actors in the financial space is a miserable testimony. Commerzbank is desperately looking for a new Chairman of the Supervisory Board, to then find a new Board. The owner of both Items have not announced their resignation, because the Bank in terms of profitability corresponds to the requirements of important shareholders. And Deutsche Bank , which has been realized once as a global leading institution, announces a restructuring after the other.

shareholders will experience crisis in their account: Who holds one share of Deutsche Bank for five years, has today only one-third of the original value. The Commerzbank share price languishes for months in order to four euros.

bankruptcies for credit losses

According to the analysis of economic researchers from hall, the Corona-induced economic crisis will stop now thousands of firms to repay their loans. The failures could weigh on Germany's banks so hard that they get themselves in Existenznot. In the optimistic scenario, in which the German economy is recovering rapidly, were still at risk of six percent and, thus, dozens of local money houses. However, scenario of a long recession of up to 28 percent and hundreds of banks would fall in the pessimist in serious trouble.

How important these banks are for the economy are illustrated by the views in their balance sheets: the total amount of The loans of the affected banks are between 127 and 624 billion Euro. Part of it could be at risk. "Even if it runs for the German economy very well, we hold a new banking crisis is likely," says IWH President Reint Gropp, who authored the study along with the IWH-financial market researchers, Michael Koetter, and William McShane. "The state has taken care of the least understandable way to the real economy, but should not overlook the possible dangers that lurk in the financial sector."

surf tip: a fear of great failure - with hundreds of thousands of Bank customers can be your loans not more

use, especially savings banks and cooperative banks with default The problems relate not only to the listed institutions. Also savings banks and cooperative banks is in danger. In the case of the cooperative structured people's banks, there is already since years a consolidation, because many of the banks alone are barely able to survive - and the year 2015, there were over 1000 institutions, in the meantime, this number has shrunk to 841 as the data of the Federal Association of the Raiffeisen - and popular banks show.

If you have many loans to fail, and as a result, the core capital ratio of the banks concerned, the case is under six percent, you will be restructured with other banks merged or closed. In any case, it would be impossible for them to grant new loans. This could weigh on the already weakened real economy in addition to strong, says Gropp, and warns: "The danger is quite high that a banking crisis will trigger a second recession."

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risk: Struggling companies are going to hesitate their inability to pay

when the forecast of the banking crisis begins, depends on several factors. For example, companies will hesitate to the time of their insolvency, while banks can conceal loans. Especially savings banks and cooperative banks should expect defaults: they lend their money mostly to companies that are now in jeopardy twice. Because they are small and are therefore generally more vulnerable to crises than large companies. On the other, because these companies belong to, in particular, such industries were trades taken from the Corona-Lockdown hard, including retail and hospitality.

how Much buffer is in the balance?

Gerhard Schick, a former Green politician, and today, the managing Board of the "citizens ' movement" financial shares turn to the analysis of the IWH. If companies would get additional loans to the crisis, the debt burden at some point too large, said Schick in an Interview: "Then it is crucial, how much the buffer banks have on their balance sheet? How much can cushion the losses?“ A second wave, triggered by a banking crisis, keeps the Chic in front of this Background, it is quite realistic.

a number of banks in Europe

to threaten According to a study by the Alliance's roles, not only to Germany but to the whole of the European banking sector loan losses in the billions. The failure rate could rise by almost three per cent in the fourth quarter of 2019 on up to 5.4 percent in the fourth quarter of 2021. Thus, a total of up to 380 billion Euro would be threatened from the failure. This corresponds to 3.2 percent of economic output in the Eurozone. Because of the growing risks, the banks may be cautious with new loans, and thus the economic recovery slow down. Earlier in retirement: So you same to buy, the deductions from pension points: they are ramping up their statutory pension Occupational pension scheme: what you need to in the disbursement of pension note calculator: How much money do you get in the old-age pension insurance number to find out how to read

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*The post "A banking crisis - and it is especially true of savings banks and people's banks" will be lurking posted by economy courier. Contact with the executives here.

Updated Date: 21 July 2020, 08:27

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