• Germany edition
 
Germany aims to protect consumer bank deposits
Photo: DPA

Germany aims to protect consumer bank deposits

Published: 31 Jan 2013 08:12 GMT+01:00
Updated: 31 Jan 2013 08:12 GMT+01:00

The government wants the law to come into effect in January 2014 and banks' activities to be separated by July 2015. It will only apply to institutions with balances sheets over €1.0 billion ($1.3 billion) or with risky positions worth 20 percent of the balance sheet value.

The rules would affect Germany's two biggest banks, Deutsche Bank and Commerzbank, as well as regional banking giant Landesbank Baden-Württemberg

(LBBW).

Banking separation is an idea floated by the head of the Finnish central bank and European Central Bank governing council member Erkki Liikanen as a measure for reducing risk in the banking sector.

But one of Deutsche Bank's co-chief executives, Anshu Jain, has repeatedly slammed the idea, saying it would "greatly harm the German economy and German companies."

He argues that if Deutsche Bank can no longer use deposits to refinance its activities in investment banking, the refinancing costs would automatically rise and that would narrow the financing possibilites of major companies.

At the same time, banks with high deposits would find it difficult to find attractive investments for customers, Jain said.

AFP/mry

The Local (news@thelocal.de)

Don't miss...X
Left Right

Your comments about this article

11:11 January 31, 2013 by pepsionice
I would offer this advice....banks that deal in investment playing....ought to be called something other than a bank. A bank's standard business should either to be a place where money is kept, loaned out, or used for home purchases....nothing more than that. We've gotten to some point where banks pretend to be lots of things, which they can't really manage.
11:20 January 31, 2013 by Navigator_B
"He argues that if Deutsche Bank can no longer use deposits to refinance its activities in investment banking ....  that would narrow the financing possibilites of major companies." Deutsche Bank seems to think that it owns those deposits that really belong to its customers and that it has a right to take whatever risks it wants with them without the owners' permission.

"At the same time, banks with high deposits would find it difficult to find attractive investments for customers, Jain said." Yes, like attractive investments using German savers' money a few years ago for overpriced property in Ireland, Spain or the US and for government bonds from countries like Greece that can never pay them back.
12:53 January 31, 2013 by Berlin fuer alles
Bolting the stable door after the horse has bolted.

Wasn't it such banks that had a big part in causing house price inflation in Ireland and Spain. German banks could not get away with this in Germany so they became bondholders in foreign banks and proceeded with such risky inflationary tactics in other EU states. Now the citizens of these countries have to bail out these banks and indirectly the German banks. But when ever did big business and banking concerns ever give a fcük about anybody.
13:03 January 31, 2013 by Omufu
Fantastic. The sooner the better. And I agree with pepsionice - very different institutions should have very different names!
13:55 January 31, 2013 by Navigator_B
Let them risk their customers money as much as they want, as long as they call themselves casinos instead of banks.
14:27 January 31, 2013 by raandy
If I want to invest my money into risky investments that is my business.

The banks using our money for risky investments is a bad practice.If the bank makes money on short term risky investments we see nothing as depositors.On the other hand if banks loose your money then the tax payers inevitably will pay for the bailout.

In the US they repealed the Glass-Steagall act in 1999 which prevented commercial banks from investing in the Wall Street Casino.This paved the way for the financial meltdown and the bailouts of 2008.
Today's headlines
Germans want sanctions and question World Cup
Chancellor Angela Merkel and President Vladimir Putin chat with Fifa President Sepp Blatter (c) in Brazil before the 2014 World Cup final. Photo. DPA

Germans want sanctions and question World Cup

The majority of Germans favour tough economic sanctions against Russia after the downing of Malaysia Airlines flight MH17. Calls in Germany are also growing also for Russia to be replaced as host of the 2018 World Cup. READ  

Yoga helped Jogi's boys bring World Cup home
Coach Joachim Löw ensured his team had a yoga instructor with them at all times. Photo: DPA

Yoga helped Jogi's boys bring World Cup home

Germany’s World Cup winning football team have revealed one of the secrets of their success in Brazil this summer – yoga. READ  

Court jails student for protest at far-right ball
Josef S. at the court in Vienna. Photo: DPA

Court jails student for protest at far-right ball

UPDATE: A German student, accused of being the ringleader of far-left demonstrators who protested at Vienna’s far-right Akademikerball, has been jailed, despite questionable evidence of his involvement. READ  

Lufthansa cancels Tel Aviv flights
A Lufthansa Boeing 747 at Ben Gurion International Airport in Tel Aviv. Photo: DPA

Lufthansa cancels Tel Aviv flights

Lufthansa said on Tuesday it was suspending its service to Tel Aviv for 36 hours over security concerns amid the escalating Gaza conflict. READ  

German state bans Hells Angels' logo online
Photo: DPA

German state bans Hells Angels' logo online

Displaying the symbols of notorious motorcycle gangs the Hells Angels and the Bandidos is forbidden across Germany, but that ban has now extended to the internet. READ  

Munich man arrested for foreigner death threats
Photo: DPA

Munich man arrested for foreigner death threats

A man from Munich was arrested on Monday for posting videos on Facebook in which he posed with a gun and threatened to kill foreigners. READ  

View from Germany
'Only losers in economic war with Russia'
Volkswagen is the German company with the biggest turnover Russia. Photo: DPA

'Only losers in economic war with Russia'

German businesses are lobbying hard against imposing tougher sanctions on Russia after the downing of Malaysia Airlines flight MH17, warning further sanctions would hurt the country's exports and threaten German jobs. READ  

Man sets himself on fire outside Israeli embassy
The Israeli Embassy in Berlin. Photo: DPA

Man sets himself on fire outside Israeli embassy

UPDATE: A man set himself on fire outside the Israeli embassy in Berlin on Monday night. Police said it was too soon to say whether it was part of a political protest. READ  

Thousands of litres of beer close motorway
Photo: NRW-aktuell.tv/YouTube screenshot

Thousands of litres of beer close motorway

Thousands of litres of beer were spilled on a motorway near Duisburg in western Germany on Monday night, when a truck carrying several hundred crates of Bitburger toppled over, shutting the Autobahn. READ  

Court allows patients to grow their own cannabis
Photo: DPA

Court allows patients to grow their own cannabis

Seriously ill patients will be allowed to grow their own cannabis at home for medicinal purposes, a German court ruled on Tuesday. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Travel
Plans unveiled for bike trail along former Iron Curtain
Photo: DPA
Business & Money
Jobtalk: How innovative is Germany?
Photo: DPA
Gallery
German Bucket List: How many of these can you tick off?
Photo: DPA
Gallery
Joachim Löw: A career in pictures
Photo: Submitted
Society
Is this expat cat the world's oldest?
Photo: DPA
Gallery
Germany's week in pictures: July 12th - July 18th
Photo: DPA
National
Heatwave to bring highs of 36C to Germany
Photo: DPA
Analysis & Opinion
Should Germany follow France and ban the burqa?
Photo: DPA
Business & Money
Which workers is Germany short of?
Photo: DPA
Gallery
Ten best expat jobs in Germany: Which one would you choose?
Photo: Europeana.de 1914 - 1918
Gallery
A German soldier's life behind WWI lines
Photo: Shutterstock
Features
Some of the most embarrassing mistakes you can make in German
Education
Raising the bar for law & business in Germany
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
Photo: DPA
Features
The Local List Archive - Your guide to all things German
National
Share news tips with The Local Germany
Sponsored Article
CurrencyFair: Why it pays when making overseas transfers
Sponsored Article
Bilingual school turning education on its head
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,246
jobs available
Toytown Germany
Germany's English-speaking crowd