RTRS – SOME BANKS WOULD NOT SURVIVE HAVING TO REVALUE ALL SOVEREIGN DEBT AT MARKET LEVELS – SPEECH TEXT.
A statement of the obvious you might think. But what makes the above interesting is the source: outgoing Deutsche Bank chief executive, Josef Ackermann.
He’s also told a banking conference in Frankfurt on Monday that earnings growth for the financial sector looks limited, he might be forced to cut more jobs if markets don’t stabilise soon, and that a solution to the sovereign debt crisis in Europe looks as far away as ever because several market players still don’t get it.
As if that were not enough he says forced recapitalisation of failing banks is neither desirable of useful and he reckons the global economy will grow at just 2.5 per cent this year.
RTRS-DEUTSCHE BANK CEO: SUGGESTIONS ABOUT FORCIBLE RECAPITALISATION OF BANKS NOT USEFUL, OR JUSTIFIED – SPEECH TEXT
RTRS-DEUTSCHE BANK CEO SAYS FORCED RECAPITALISATION OF BANKS WOULD SEND THE SIGNAL THAT POLITICS HAS LOST FAITH IN EXISTING MEASURES
RTRS-DEUTSCHE BANK AG CEO SAYS THE FUTURE OF GROWTH OF EARNINGS IN FINANCIAL SERVICES LOOKS LIMITED
RTRS-DEUTSCHE BANK CEO SAYS THE DEBT CRISIS, REGULATION WILL MAKE IT MORE DIFFICULT FOR EUROPEAN BANKS TO RAISE REVENUES
RTRS-DEUTSCHE BANK CEO SAYS SOVEREIGN DEBT CRISES ARE NOT EASY TO RESOLVE QUICKLY
RTRS-DEUTSCHE BANK CEO SAYS SOME MARKET PLAYERS HAVE UNREALISTIC EXPECTATIONS ABOUT HOW TO RESOLVE SOVEREIGN DEBT
DEUTSCHE BANK AG CEO SAYS MARKET VOLATILITY WILL REMAIN FOR AS LONG AS THERE IS INSECURITY ABOUT THE PATH TO REDUCING DEBT
RTRS-DEUTSCHE BANK CEO SAYS IF TREND IN MARKETS FROM AUGUST CONTINUES IN SEPTEMBER OCTOBER NEED TO THINK ABOUT COST CUTTING MEASURES
RTRS-DEUTSCHE BANK CEO SAYS HAS PIIGS EXPOSURE OF AROUND 3 BILLION EUROS
RTRS-DEUTSCHE BANK AG <DBKGn.DE> CEO SAYS SEES GLOBAL GROWTH OF AROUND 2.5 PERCENT
Oh, and he doesn’t like the idea of euro bonds.
RTRS-DEUTSCHE-BANK-CHEF ACKERMAN – BIN HEUTE ABSOLUT GEGEN EUROBONDS
The question is what has prompted this straight talking? Is he trying to soften up the market beyond that? Probably not. Akermann has already warned investors that pre-tax profit targets for Deutsche’s investment banking arm might be difficult to achieve. The way to see this is a shot across the bows of the new IMF boss, who has called for forced recapitalisations.
Indeed, let’s recall for one moment what Largarde actually said at Federal Reserve’s annual gathering of central bankers in Jackson Hole last month.
Second, banks need urgent recapitalization. They must be strong enough to withstand the risks of sovereigns and weak growth. This is key to cutting the chains of contagion. If it is not addressed, we could easily see the further spread of economic weakness to core countries, or even a debilitating liquidity crisis. The most efficient solution would be mandatory substantial recapitalization—seeking private resources first, but using public funds if necessary. One option would be to mobilize EFSF or other European-wide funding to recapitalize banks directly, which would avoid placing even greater burdens on vulnerable sovereigns.
An outcome Ackermann and others will be understandably keen to avoid.
Related link:
Lagarde calls for urgent action on banks – FT