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Europe

EU integration greatly influences policy-making at the national level, and the EU itself is a major actor on the world economic stage. Most of the conditions governing the economic and business environment for European companies and consumers - especially in respect of the financial markets - are decided at the European level. For this reason, Deutsche Bank Research analyses and appraises the latest developments in the EU and EMU. European banks and financial markets are a major focus in this regard.

165 (91-100)
November 2, 2015
Region:
Analyst:
The creation of a European Capital Markets Union (CMU) aims to establishing a single market for capital to complement bank financing. In this paper, we make a quantitative assessment of the European stock, bond and securitisation markets to look at the CMU’s potential. Our results reveal that liquidity and IPO trends in European stock markets are similar to those in the US. However, market integration has slowed down in recent years, which the CMU could counter by harmonising company, securities and insolvency laws. European corporate bond markets have become a notable alternative to bank lending but their investor base remains restricted, which the CMU should address. The securitisation market in Europe has performed well throughout the crises and its revival is a sine qua non for lending to regain traction, especially to SMEs. The CMU should thus target a less punitive regulatory treatment for this market segment. [more]
92
August 21, 2015
Region:
After literally seven lean years, the European banking industry’s recovery from the financial crisis is now in full swing. Profits are at their highest level since 2007, revenues are growing across the board (helped by favourable currency effects) and loan losses are falling. Banks are also expanding business volumes. Capital ratios are on average substantially above Basel III requirements, though uncertainty has increased recently due to a pending further regulatory tightening (“Basel IV”). [more]
93
August 19, 2015
Region:
Reform of deposit guarantee schemes (DGS) in the EU has followed a gradual approach. The latest reform established common requirements on financing for national schemes but funds remain separate. The debate about the future of DGS has been revived recently, though. The five presidents' report on completing Europe's Economic and Monetary Union put DGS reform back into the larger reform discussion and identified deposit insurance as one of the areas of the Banking Union still pending completion. While joint deposit insurance may seem a rather long-term option, several short- and mid-term suggestions to complement DGS have been raised. They put an emphasis on adapting the current setup with a view to increase back-up financing capacity of individual schemes. Ideas include i) strengthening the network of DGS and possibilities for bilateral lending, ii) establishing a reinsurance scheme, iii) developing a common fiscal backstop to national DGS. [more]
94
August 13, 2015
Region:
Analyst:
In March 2015, the 28 European Heads of State and Government committed themselves to creating an Energy Union. In principle, the commitment to even stronger cooperation on energy and climate issues is a step forward, even though the decisive impetus came from grave concerns about potential gas supply disruptions as a result of the conflict between Russia and Ukraine. The current discussion also indicates that the Energy Union should initially focus on the further improvement of natural gas supply in Eastern Europe. The further development of infrastructures and markets for grid-based energies are likely to become target areas as well. By contrast, contentious topics such as the nuclear phase-out in Germany and country-specific subsidy programmes for renewable energies are unlikely to be a target area yet. We thus expect an incremental policy of small steps, i.e. by no means a rapid and radical transformation of the European energy sector as a whole. [more]
95
August 7, 2015
Region:
It is the classical dilemma of any currency union that a single monetary policy cannot possibly be appropriate for everybody if members are at very different stages of the business cycle. To get a feel for the scale of monetary (mis-)alignment, we calculate central bank rates as implied by a modified Taylor rule. [more]
96
July 31, 2015
Region:
As a key element of the new reform agenda for Greece stipulated at the latest eurozone summit, privatisation has become a major issue for the southern European country. However, privatisation should be a topic for other governments in the euro area, too, given the high public debt in many countries. Nevertheless, a look at the privatisation policies in selected countries shows different priorities. [more]
97
June 11, 2015
Region:
European banks had a successful start into 2015. Business activity improved, asset quality did so as well and profitability rose again, as the rebalancing of the industry made further progress. The ECB’s new large-scale market interventions helped strengthen sentiment in financial markets, and contributed to the continuing decline in the euro exchange rate – which on balance may have been beneficial for banks. [more]
100
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