The CEO of Deutsche Bank is attacking.

“We are at a point in Europe where we are going over the top,” said Christian Sewing during a panel discussion at the Frankfurt Euro Finance Summit.

The regulation continues to increase.

Sewing cited sustainability reporting as an example of the growing demands.

Inken Schönauer

Editor in business, responsible for the financial market.

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    "We have to be careful to find a balance in order to be competitive," said the CEO of Deutsche Bank. When it comes to regulation, Sewing's planned additional capital requirements under the heading Basel IV and the European security fund for banks are a thorn in the side of Sewing. As a result of the financial crisis, he considered both to be sensible, but now has little understanding for ever further increases.

    With the current plans, the requirements for banks in the EU would increase on average by a good 18 percent, large institutions would be affected even more with more than 25 percent, Sewing said.

    That has serious consequences for the economy.

    All other things being equal, European banks could provide EUR 8.5 trillion less in loans.

    "On the other hand, US banks would even benefit minimally from the Basel IV rules in terms of equity."

    Resolution fund contributions increase

    With the European resolution fund, the contributions would increase year after year, Sewing said. The total premium income for 2021 was more than 10 billion euros - compared to 2016, this is an increase of over 60 percent. However, this is not because the risks in the European banking system have increased, but primarily because the loose monetary policy continues to inflate the balance sheets. As a result, the chosen calculation model now estimates the target volume of the fund at 78 billion euros. If the originally targeted volume of 55 billion euros were to remain, the European banks could, according to Sewing, issue additional loans in the three-digit billion range to the economy.

    With these clear words, Sewing is apparently already setting the first priorities for his time as bank president. As is well known, Sewing has already been elected and will take over the baton from Hans-Walter Peters on July 1st. Peters returned to the presidential post last year after the actually elected successor Martin Zielke surprisingly announced his retirement from Commerzbank's chairmanship.

    The sluggish progress of the banking and capital markets union is repeatedly criticized in financial circles. State Secretary for Finance Jörg Kukies said at the conference that progress had been made on the subject, but that it was not enough. “The EU Commission now has to really step on the gas again,” said Kukies. However, the topic is complex. Here, too, Deutsche Bank boss Sewing focused on the topic of sustainability in his remarks. A common European capital market is the prerequisite for the transformation to a sustainable economy. This requires so much capital from private investors that only an integrated European capital market will be able to meet this demand. "Without an integrated capital market in Europe there will be no 'Green Deal'", Sewing said emphatically.

    Pandemic Purchase Program Dissent

    Bundesbank President Jens Weidmann said at the event that he could envision a gradual expiry of the trillion dollar pandemic bond purchases by the European Central Bank (ECB) when the time comes.

    "Due to the still existing uncertainty, we cannot determine the exit from the monetary policy crisis mode far in advance," said Weidmann at the event.

    In order not to have to abruptly end the pandemic purchase program PEPP, the purchases could be gradually reduced in advance, he said.

    Apparently there is no consensus on this.

    ECB Director Fabio Panetta has meanwhile spoken out in favor of maintaining key elements of the monetary policy crisis policy even after the pandemic has been overcome and apparently also had the PEPP in mind. "We should strive to maintain the unconventional flexibility that served us well during the pandemic," Panetta said Monday at a conference of the central banks of the Mediterranean, according to Reuters news agency.