A renewed focus on profitability and strategic refocusing among German banks leads Moody’s Investors Service to believe that “the country's banks will not undergo a systemic crisis”, the rating agency said in a report on the German banking sector, published today.While Moody's is maintaining its negative outlook on German banks’ ratings, it does not believe a systemic banking crisis is imminent in Germany. It said this is because all banks are taking steps to improve their profitability by cutting costs, enhancing their risk management practices (to comply with Basel II) and rethinking their business models.
"The main challenge facing the German banking system at the moment is its very low profitability, which is the result of a combination of structural, management-related and cyclical problems," Moody's added.
The rating agency also noted that German banks' poor profitability can no longer be underpinned by hidden reserves, as these are now depleted.
More on Risk Management
Banks need to embrace radical change to satisfy Basel principles
New watchdog a great idea in theory, banks say - but early months have been difficult
ABSTRACT This paper is concerned with the derivation of a residual-based a posteriori error estimator and mesh-adaptation strategies for the space-time finite element approximation of parabolic problems...
Welcome to The Journal of Computational Finance's Online First Forum. Here you will find the latest peer reviewed, accepted papers before they are available in print. With Online First publication,...
Sign up for Risk.net email alerts
Sponsored video: MarketAxess
Sponsored video: Tradeweb
Multifonds talks to Custody Risk on being nominated for the Post-Trade Technology Vendor of the Year at the Custody Risk Awards 2014
Sponsored webinar: IBM Risk Analytics
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.