The Association of German Banks (BdB) is confident about growth prospects this year.

The advocacy group for private institutes headed by Deutsche Bank CEO Christian Sewing believes growth of 3.5 percent is possible.

At the video conference on Wednesday, BdB General Manager Christian Ossig said: "That would be a really strong growth spurt that would make us really confident about the new year."

Markus Fruehauf

Editor in Business.

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Nevertheless, he referred to risks, including the Ukraine conflict, the corona pandemic, the situation in China and energy prices.

He is concerned about the low demand for corporate loans.

Ossig, who has been the sole general manager of the banking association since Friday after Andreas Krautscheid left, considers this to be problematic.

“We still have a high level of uncertainty when it comes to investments,” is his explanation.

In addition, new challenges were piling up, the main one being inflation.

Ossig reiterated his criticism of the monetary policy of the European Central Bank (ECB), which he had already practiced on Monday in a joint event with the German Economic Institute (IW). The ECB urgently needs to present a roadmap on how it wants to get out of crisis mode .

"We need an end to the massive bond purchases and the negative interest rate policy," Ossig demanded.

Contradictory politics

The private banks are reacting with incomprehension to the tightening of the equity rules for residential real estate loans, which the Federal Ministry of Finance, the Bundesbank and the financial supervisory authority BaFin decided in the Financial Stability Committee a few weeks ago.

An increase in capital requirements of 10 percent is to be expected for some institutes, said Ossig.

He now fears the effects on the conditions for real estate loans, which he says are likely to become noticeably more expensive after the KfW construction subsidy programs are stopped.

The additional capital buffers constrained banks' lending capacity, which Ossig says is inconsistent with policies encouraging banks to fund the transition to a zero-carbon economy.

Big risks without rules

He did not comment on the EU Commission's decision to classify nuclear power and gas energy as transitional technologies and thus as sustainable.

However, clear rules for sustainable financing and investments, as set out in the so-called EU taxonomy, are necessary so that the banks can "steer clear of the greenwashing minefield".

Without clear rules, there are major risks for the banks that could jeopardize their credibility.

DWS, the fund company of Deutsche Bank, has to deal with allegations against the supervisory authorities that they have reported their sustainable investments too generously.

According to Ossig, the transformation of the economy can bring many opportunities for the banks.

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