Financial regulator Bafin sees tough times ahead for German banks. The rapid rise in market rates could cost many small and medium-sized institutions, executive director Raimund Röseler warned in an interview with Handelsblatt. “My guess is that a lower double-digit number of banks will be in serious trouble.”
Brokerages had provided long-term loans at low interest rates but now had to pay more to refinance them, Bafin’s top banking watchdog said. “Not all houses have adequately hedged this risk.”
In addition, Röseler fears that loan defaults could rise more than banks had estimated. “The conditions are there for a perfect storm,” said Röseler. “There are high rates of inflation and rising interest rates.” He also said that further turmoil in financial markets and a recession cannot be ruled out.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
