German banking problem is bigger than that of Deutsche Bank

"The German banking problem is bigger than that of Deutsche Bank», is the title of the publication of the Wall Street Journal, which refers to the fragmented banking system. Such a fragmented system was most common in Europe decades ago, but the reforms in other countries have allowed mergers type different banks, which today remains politically difficult in Germany, noted the report. "Legal restrictions prevent the acquisition of savings banks (Sparkassen) of larger private banks, such as Commerzbank or Deutsche Bank», he adds.

Germany may be the economic and political superpower of Europe, but it is not clear whether the banks considered, noted quotes in the article. A recent poll company TNS Emnid for Focus magazine showed that 69% of respondents were opposed to any form of state aid to Deutsche Bank and only 24% in favor of this. "The Deutsche Bank, the third largest European bank, not the only (in trouble). The smaller rival Commerzbank has announced plans to reduce its staff by 20% and the reduction of activities. Other large banks hit by the global crisis on shipping. The policy of very low interest rates of the ECB devours the revenues of numerous savings banks and cooperative banks belonging to regional authorities. 
While banks in other countries, like Italy, have to face the problem of "red" loans, in Germany the problem is more structural: Too many banks are struggling in the same place and not all with the same sense of the need to satisfy shareholders their. In addition to the large, listed companies, German banks, the German retail banking map is characterized by public banks, Sparkassen and cooperative banks, the Volksbanken and Raiffeisenbanken.

The efficiency problem of German banks disclosed when compared their results with those of French banks. Large French banks recorded a return on equity (earnings on their equity) 6.18% at the end of last year, while the German 4.51%. The yield on regional French banks rose to 8.88% while the German mere 2.65%, according to data from FactSet.

Experts say, the report added that Germany simply has more banks than it needs. The ECB data showed that Germany had in 2014 the lowest population per bank ratio between the major economies of the eurozone, with 45 552 inhabitants correspond to a credit institution. In comparison, in Spain the ratio was 205 593 inhabitants per bank.

The Sparkassen are a force both in terms of numbers and political power. A little more than 400 savings banks employ about 234,000 employees and have 44 million deposit accounts.

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