Talking Point

In Talking Point we present our take on current affairs and developments in the worlds of business, financial markets and politics.

July 3, 2015

Operation “Digital transformation of the financial sector” (Fintech #1)

Region:

Germany

Talking Point

Topic:

Banking and financial markets, Macroeconomics

Analyst:

Thomas-Frank Dapp

The digital strategies currently unveiled by traditional banks do not go far enough and often deliver only fragmented silo solutions. With each division “doing its own thing” and adopting the silo principle that stifles innovation, many (digital) financial innovations are primarily experienced at the client front-end and are also warmly welcomed. However, the banks will not achieve resounding success using such methods. [more]

151

June 30, 2015

Down the rabbit-hole

Region:

Topic:

Analyst:

These days, financial market commentaries are often laced with expressions such as "topsy-turvy" and "Alice in Wonderland". Recently, even Bank of Japan Governor Kuroda described the need for unconditional faith in the inflationary impact of Japanese monetary policy with a reference to Peter Pan, quoting Peter as saying that (in his world) "the moment you doubt whether you can fly, you cease forever to be able to do it". [more]

152

June 26, 2015

Increasing longevity of cars is hampering market penetration of alternative propulsion technologies

Region:

Germany

Talking Point

Topic:

Economic and european policy, Macroeconomics, Sectors and resources

Analyst:

Eric Heymann

The average age of cars on German roads hit a new record high of nine years at the beginning of 2015. The primary reason for this is the improved quality of vehicles. Although the diesel share of new car registrations has averaged well over 40% in recent years, diesel only constituted 31% of the cars on German roads at last count. The durability of cars is causing the mix of cars in service to change only slowly. The diesel car example suggests that it may take many years before cars powered by alternative technologies constitute a major share of all the cars registered in Germany. The vision of a future with largely climate-neutral or locally emission-free vehicles on German roads by 2050 is virtually unattainable as things currently stand. [more]

153

June 22, 2015

Migration boom continued in 2014, but calls remain for policy action

Region:

Germany

Talking Point

Topic:

Economic and european policy, Macroeconomics

Analyst:

Dieter Bräuninger, Vanessa Nagel

Germany was an attractive destination for migrants in 2014 for the fifth year in a row. The net migration balance climbed again by roughly 20% on the year and clearly exceeded the 500,000 mark for the first time since 1992. Roughly 1.4 million persons immigrated to Germany, the second highest total in the last 65 years (1992: 1.5 million). Since the beginning of the sovereign debt crisis in the eurozone in 2010 a net 1.7 million persons have migrated to Germany, so despite a shrinking domestic population the total population has expanded by approximately half a million. [more]

154

June 18, 2015

Industry 4.0: China seizes an outstanding opportunity in the “Year of Innovation”

Region:

International

Talking Point

Topic:

Economic and european policy, Macroeconomics, Sectors and resources

Analyst:

Stefan Heng

Industry 4.0 (also known as integrated industry, industrial internet) is currently the subject of intense debate. This megatrend sets out to change the way goods and services are created and distributed, reshaping the industrial landscape on a national and global scale. China intends to play a leading role in this digital evolution. A wide range of policies have been initiated and sizeable progress in various areas has been made. The country is determined to seize the outstanding opportunity at hand, as the recently unveiled “Made in China 2025” plan underlines. China still has a long road ahead. However, with its new plan it combines a long-term vision with concrete actions in the proclaimed “Year of Innovation”. [more]

155

June 11, 2015

European banks: Healing continues

Region:

Europe

Talking Point

Topic:

Banking and financial markets

Analyst:

Jan Schildbach

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]

156

May 28, 2015

Dark clouds over lignite

Region:

Germany

Talking Point

Topic:

Economic and european policy, Macroeconomics, Sectors and resources

Analyst:

Josef Auer

The German government is sticking to its target of reducing greenhouse gas emissions by 40% from the 1990 level by 2020. As it currently seems doubtful that the target will be achieved, Minister of Economics Sigmar Gabriel suggests introducing an additional climate contribution for older electricity power plants with particularly high CO2-emissions. Especially older lignite-based power plants would be affected by such a measure. And this at a time when many power plants are under pressure anyway due to changes in the investment strategies of a large Scandinavian investor. [more]

157

May 11, 2015

German industry: Only marginal increase in output at start of 2015

Region:

Germany

Talking Point

Topic:

Macroeconomics, Sectors and resources

Analyst:

Eric Heymann

Despite only marginally higher output in Germany's manufacturing sector in Q1 2015 we are sticking with our full-year production forecast (+1.5% in real terms). The current softness of the euro benefits Germany's export sectors. Nonetheless, companies appear much more upbeat in their assessment of the current situation than in their expectations for the coming months. This is likely due, for example, to continuing geopolitical risks and poorer economic policy conditions in Germany. So it is clear that in the business world not everything is sweetness and light. [more]

158

May 8, 2015

No all-clear signal from demographics

Region:

Germany

Talking Point

Topic:

Economic and european policy

Analyst:

Dieter Bräuninger

The latest population projections by Germany's Federal Statistical Office once again highlight the Herculean task of coping with demographic change. Once immigration begins to fall from its current temporary high, the fair weather in the labour market caused by rising employment figures may already turn cloudy within the next ten years. Consistent political action in the fields of old-age provision and long-term care is required given rising life expectancy and the expected doubling of the number of the very elderly. [more]

159

April 17, 2015

Minimum wage: First negative effects become visible

Region:

Germany

Talking Point

Topic:

Economic and european policy, Macroeconomics

Analyst:

Heiko Peters

Roughly 100 days have passed since the introduction of the minimum wage, and the Minister of Labour Andrea Nahles is already calling it a success story. However, we would urge caution given the considerable time lags with the effects of the minimum wage of EUR 8.50 per hour. In the medium term, we continue to expect clearly negative effects on employment and a missing of the targets of a more just income distribution and fiscal relief. In the medium term, we still expect a negative employment effect of 800,000 persons in line with our ex-ante study "Minimum wage of EUR 8.50 per hour: Grand Coalition on the wrong track". [more]

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