• Germany edition
National
Photo: DPA

Germany aims to protect consumer bank deposits

Published: 31 Jan 13 08:12 CET | Print version
Online: http://www.thelocal.de/national/20130131-47669.html

Germany aims to introduce legislation on banking separation in order to protect customers' deposits from riskier areas of business, according to a draft law seen by news agency AFP.

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

What do you think? Leave your comment below.


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.
ADD YOUR COMMENT   (YOU MUST LOG IN OR REGISTER TO MAKE A COMMENT)
Today's headlines
Social Democrats seek revival on 150th b-day

Social Democrats seek revival on 150th b-day

Germany's Social Democrats, trailing behind the conservatives in the polls just months ahead of the elections, are looking to relaunch themselves as they celebrate their 150th anniversary later this week. READ () »

Photo: DPA

Germans bathe easy in clear waters

German outdoor swimming spots are cleaner than ever, results from a European Commission survey showed on Tuesday. On the whole, the EU's water quality has, it said, significantly improved. READ () »

Photo: DPA

Spain and Germany fight youth employment

Germany has agreed to provide vocational training and jobs for young Spaniards starved of opportunities in their crisis-hit home country. READ () »

Photo: DPA

Justin Bieber's monkey becomes 'German'

Justin Bieber's pet monkey, which was seized by German customs in March, officially became German property this week after the Canadian pop star failed to claim the animal, officials said. READ () »

Photo: DPA

First bison born in wild 'for centuries'

A wild bison has been born in Germany for the first time in centuries. The lead female of a herd released from captivity in April gave birth to the calf on May 5th, it was revealed on Tuesday. READ () »

Photo: DPA

Conservatives demand East German symbol ban

Germany's Christian Democrats (CDU) called on Tuesday for symbols associated with the totalitarian socialist regime of former East Germany to be banned, in the same way that it is illegal to display Nazi memorabilia. READ () »

Photo: DPA

States to toughen laws on drunken cycling

German state interior ministers are hashing out a plan to lower the amount of alcohol cyclists can legally consume before getting on their bikes. The measures come as figures show one in 10 bike accidents are the result of drunk riders. READ () »

Photo: DPA

The Doors keyboardist Ray Manzarek dies at 74

Ray Manzarek, co-founder of legendary 1960s rock band The Doors and creator of their signature organ sound, died on Monday in Germany after a long battle with cancer, his manager said. He was 74. READ () »

More National
RECEIVE OUR NEWSLETTER AND ALERTS
Highlights
Photo: DPA
SOCIETY »
20,000 Goths gather in Leipzig
Photo: DPA
LIFESTYLE »
Harmless pink fun or a bad influence on young girls? A life-size Barbie dream house attraction opened in Berlin to protests including a topless woman burning a doll in effigy.
Photo: DPA
OPINION »
At his final heartbeat I knew I had to act. Our German of the Week is Tina K., who, after her brother was beaten to death, has been campaigning for an end to street violence in Berlin.
Photo: DPA
LIFESTYLE »
The Local List: Ten German words with double meanings
Photo: DPA
LIFESTYLE »
The Local's English-language movie listings for Germany
Photo: DPA
SOCIETY »
Conflict is part of the fabric of Berlin, but the city's "Peacemaker" soothes things over. Jessica Ware tracked him down for a chat.
Photo: DPA
OPINION »
It might be politically toxic, but it's time to hit the brakes on Germany's reckless driving culture, argues The Local's Ben Knight.
Photo: M&S
SPONSORED ARTICLE
Move over Berlin: why London is Germany's new fashion capital
Photo: Private
OPINION »
For this edition of My German Career, former US military man turned armed guard Keith Alban talks about leaving home in search of a better quality of life.
Photo: Katie Needs
SOCIETY »
Offseason, Germany's largest island Rügen might not top many peoples' list of dream holidays. But as The Local discovered, its quiet beauty makes it worth a trip to escape city bustle.
Photo: DPA
OPINION »
Confused about the hundreds of euros missing from your pay packet? Don't panic - the latest in The Local's JobTalk series looks at German social security payments.
Photo: DPA
LIFESTYLE »
Is that your Handy ringing? This week's Local List takes a look at 12 misused English words in German.
Photo: A Peoples' Picture
LIFESTYLE »
An American is stirring up creative spontaneity in Dresden by leaving disposable cameras around for strangers' use, before collecting them and displaying the results online.
Photo: Private
LIFESTYLE »
After it was revealed that Angela Merkel had a Polish grandfather, Matthew Luxmoore set out to find where she could connect to her roots in Berlin's sizable Polish community.
Photo: DPA
LIFESTYLE »
Why isn't everyone wearing Lederhosen? It's easy for foreigners to stereotype Germany, but this week's Local List is dedicated to debunking common myths.
Photo: Private
OPINION »
The last time Si Liberman saw Berlin, he was thousands of feet in the air on a US bombing raid over Nazi Germany. Nearly seven decades later, he returned to the city.
Photo: DPA
OPINION »
What are the hidden rules of etiquette foreigners need to watch out for while doing business in Germany? The Local's JobTalk series has tips for keeping on the right side of your colleagues.
Photo: DPA
NATIONAL »
All of The Local's 'Germans of the Week' so far
Photo: DPA
NATIONAL »
Every town and city from The Local's My Germany series
Furniture Leasing Corporation
SPONSORED ARTICLE
The furniture-free way to relocate to Germany
Photo: Henrik Trygg/imagebank.sweden.se
SPONSORED ARTICLE
Top five reasons to enrol on an Executive MBA



Latest news from The Local in France

More news from France at thelocal.fr

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

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

See all ads | Join the Marketplace

Jobs in Germany, in English

803 jobs available
568 new jobs this week
0 new jobs today

ALL JOBS »

Blog
Essentials

Dating
Looking for your own blonde bombshell? Or is the strong, silent type more your style? Find a German sweetheart here.

Weather
"After clouds comes clear weather," say the Germans. But what about after that? Find out in The Local's weather section.

Blog
German stuff that's distracting us today.

Noticeboard
Whether you want to buy, sell, hire, announce or promote something, here's the place to do it - completely free of charge.

Discuss
Debate the news, ask for advice, make friends - or just let off steam.

Search News


Register

Register now for:
> Free use of noticeboard
> Special discounts
> Weekly news roundup
> Unlimited use of discuss

REGISTER FOR FREE »

News from the Goethe-Institut
News from Young Germany
News from DeutschlandOnline

Toytown Germany
Germany's English-speaking crowd
Trade CFDs with InterTrader.com
Start trading shares, equities, forex, etc. No commission on equities; Low min. margins. Apply for a CFDs account now!
Little house in Spain
'Charming, old, beamed cottage for holiday let in Jesus Pobre, Alicante, Spain
www.littlehouseinspain.com/
Albatross Insurance
Professional and qualified consultancy on all insurance and finance matters in Germany, Telephone: +49 2163 571 1740, Email: bg@albatross-assurance.com
www.albatross-assurance.com
Hotel reservations in Berlin
Visiting Berlin anytime soon? Book your hotel in Berlin here.
Rental apartments in Berlin
For home-from-home holiday accommodation, search for a Berlin apartment to rent.