Christian Sewing in his function as bank president is now speaking of false incentives in the previous security system of private banks for customer deposits.
He knows what he's talking about, because as CEO of Deutsche Bank, he heads the most important member institute in the Association of German Banks (BdB).
In troubles such as Greensill recently, the major private banks such as Deutsche Bank or Commerzbank have to do the most to compensate savers.
This is one of the reasons why “false incentives” should now be capped.
According to the municipalities and states, public-law institutions such as municipal utilities or broadcasting companies will in future go away empty-handed if they invest their money in the attractive interest-bearing accounts of a small institute.
But the real disincentives in the banking association's deposit insurance were the far too high performance promises that it cannot fulfill.
That was already the case with the compensation of the Lehman customers.
The banking association needed a guarantee from the German state for the 6.6 billion euros.
The European Central Bank (ECB) and the EU Commission will closely monitor Sewing's reduced saver protection.
You want to introduce a European deposit insurance scheme.
But the confidence of German savers will not be strengthened if ailing banks from southern Europe can also access the protection systems in the future.