Deutsche Bank Vice President Karl von Rohr has warned politicians against making equity capital rules stricter for banks in light of the precarious economic situation. “We don’t think it makes sense to tighten some of these tools now,” he told the Frankfurter Allgemeine Sonntagszeitung newspaper. You should not lose your balance in the current situation.
“For every euro that we do not have to hold as additional capital or pay it into the European Settlement Fund due to regulatory requirements, we can provide between 20 and 40 euros in additional credit volume, depending on the type of loan and its guarantees.” Deutsche Bank estimates up to 700 billion euros of potential credit that will not be available to companies due to various regulations.
Deputy Deutsche Bank warns: the inflation rate may rise to “10 percent and more”.
Executive Vice President of Deutsche Bank concerned about high inflation. We expected that we would be at an inflation rate of between 7 and 8 percent over the course of the year. “In case energy imports are more limited, we could even see 10 percent and more,” he told the newspaper. “We have to be prepared because we might get inflation rates we haven’t seen since the 1970s.”
Regarding the interest rate policy of the European Central Bank, von Rohr believes that an increase in interest rates is “urgently necessary” “so that inflation expectations do not harden at a high level.”
Does the interest penalty expire?
On Thursday, the European Central Bank (ECB) decided to keep its key interest rate at zero percent despite persistently high inflation. The benchmark interest rate in the currency area of the 19 countries has been at a record low of zero percent for nearly six years now.
Furthermore, von Rohr promised to put an end to the penal interest for savers. Once the central bank waives negative interest rates, there will be no reason for us to charge custody fees in clients’ private businesses. It has to be done very quickly.”