What’s the matter with German banks?

If you think about German banking, your first thoughts are likely Deutsche Bank’s history of negative headlines and crashing stock price over the last many years. There is a widely held perception across the financial markets that Germans are brilliant engineers, but terrible bankers. And there are the jokes: if no one else will buy it, then a German probably will.

None of that is the reality.

German bankers are good. They are incredibly well trained and professional. They are polite and willing to listen and learn. (In contrast: the Spanish think they know best, the Italians are sure of it, while French bankers consider themselves an intellectual elite because they can spell “derivative”.) German financial professionals generally ask smart and direct questions. They aren’t risk adverse – they analyse and understand risks.

What has created the perception of bad German banking is two inter-related factors:

The first is an incredibly diverse banking sector. Despite a history of successful merchant banking in 16th century German states, there are simply too many small local banks competing for business to have allowed the development of large national champions. Large parts of the sector are locally focused around six regional Landesbanks, 350 plus Savings Banks and over 850 Cooperative Banks.

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Πηγή: capx.co

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