Skip to comments.German Banks an Accident Waiting to Happen: Expert
Posted on 07/02/2013 7:17:52 AM PDT by Lorianne
Germany's banking system is one of the worst in the world, according to Paul Gambles, managing partner at advisory firm MBMG International, who told CNBC that Deutsche Bank is over-leveraged and is an accident waiting to happen.
Responding to German retail sales data, which showed a surprise rise of 0.8 percent month-on-month in May, Gamble said that Germany was the key problem with the euro zone project. German exports to the rest of Europe ensure that it remains the profitable powerhouse of Europe, but that wealth is then transferred back to the struggling periphery through bailout agreements.
"Germany is the big problem...we've got this transfer of wealth that goes on all the time from the periphery to the core and what Germany is actually doing is recycling that as funding for the periphery," he said. "The other thing that doesn't get pointed out is just how dependent this horrible, bloated German banking system - which to me looks like one of the worst banking systems in the world - has now become."
Gambles singled out the country's biggest lender as being an "accident waiting to happen" and said it has been for the last five years.
"Deutsche has still got horrible leverage based on very poor quality assets. A lot of the reason that we have had the policies that we have had since 2008 have been about trying to keep the German banking system alive," he said.
Deutsche Bank ‘Horribly Undercapitalized’: US Regulator
“Deutsche has still got horrible leverage based on very poor quality assets. A lot of the reason that we have had the policies that we have had since 2008 have been about trying to keep the German banking system alive,” he said.
A stunning example of why it is a dangerous thing to have an interconnected worldwide economy. One domino can cause all of the others to fall.
sounds like we need the More Cowbell guy here...
The big crash will begin in Germany, just like it did in 2009. Good subject, but what a poorly written article.
those loans to greece, spain, portgual and god know what other dead beats
have to pay off sometime don’t they??
as maggie the great said
facts are a very conservative thing.
I hope my paraphrasing is not offensive.