German banks lack expertise, risk management and money, says regulator
FRANKFURT – German financial regulator Bafin has called for banks to exercise better risk management in the wake of the credit crisis.
The German federal watchdog said German banks’ risk management had been caught unprepared for the complex global risks highlighted by the crisis.
“Banks need to set up their risk management systems in such a way that they can tell in time when extreme situations are approaching, and to remain able to act once they have arrived,” said Bafin president Jochen Sanio. “Expertise, risk management and money, that is what the German banks that plunged into the subprime adventure lack.”
Last year, German banks IKB and Sachsen LB were badly hit by the liquidity crisis and required billions of euros in bailouts.
More on Regulation
ABA calls for better ways to compare bank capital between countries
US regulator will pursue a quicker route to exempt foreign CCPs
ECJ decision means new problems for data preservation
Discussion crystallises over regulatory streamlining
Sign up for Risk.net email alerts
Sponsored webinar: IBM
Watch highlights of this year's London conference
Operational risk and the challenges of defining and dealing with conduct risk
Watch discussions and speakers from our North America conference
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.