After the laboriously negotiated takeover of the ailing Credit Suisse by the Swiss central bank UBS, unrest continues to reign in the financial markets. The Deutsche Bank share is one of the biggest losers on the DAX ahead of the weekend. However, the recent slump in the share price offers no cause for concern for German Chancellor Olaf Scholz.
“There is no cause for concern,” Scholz said Friday after an EU summit in Brussels. “Deutsche Bank has fundamentally modernized and reorganized its business model and is a very profitable bank,” the SPD politician said when asked if Deutsche Bank was the next Credit Suisse.
Looking at the European financial markets, Scholz said, “The banking system is stable in Europe.” He added that the EU has supervisory structures that have enforced strict rules. He told European banking supervision and the financial system are robust and stable, and European banks have resilient capitalization.
At the same time, work on the Capital Markets Union and Banking Union should be accelerated. Scholz said these are just as important for growth in Europe as the single market. “They will make it possible for more capital to be deployed, to be deployed in the right place.”
Whether the worries are exaggerated or not, the situation in the banking sector is very fragile, which is also weighing on the market as a whole. The volatility of bank shares is likely to remain high for now. Investors will therefore stay on the sidelines for Deutsche Bank for the time being.