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Talking Point

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

134 Documents
November 25, 2019
Region:
Passenger numbers at German airports recently fell for the first time since December 2017. The decline is largely due to economic reasons, such as the cyclical slowdown and lower supply due to airline bankruptcies. Air travel is increasingly coming into the focus of climate-policy regulation. Traffic at regional airports may be hit most. In contrast, large airports are likely to see passenger numbers increase further. “Flight shame” looks set to remain a niche phenomenon. [more]
1
November 21, 2019
Region:
In the lending and deposit-taking business with retail customers, there are substantial differences between the federal states. 30 years after the fall of the Berlin Wall, per capita loan volumes in east Germany are significantly lower than in the west. The latter, in turn, is characterised by a certain north-south divide. Savings banks have a market share of 25-35% throughout the country, whereas cooperative banks have a much stronger presence in the south and west than in the east and north. The large banks achieve an above-average market share of 20-25% in the city states and east Germany. The spread between the federal states is smaller for deposit volumes than for credit volumes. Primarily the savings banks, cooperative banks and other commercial banks have to cope with a considerable deposit overhang and thus an "investment plight" in the negative interest rate environment. In east Germany, the deposit overhang is particularly large. Due to digitisation, changes to the established regional focuses might now be possible. [more]
2
November 20, 2019
Analyst:
Trading volumes in foreign exchange instruments have increased significantly across the board in 2019 compared to the last global FX survey three years ago. Surprisingly, the pivotal role of London as the main trading location was reconfirmed, despite fears around the impact of Brexit. Yet a general move to central clearing might challenge this after the UK leaves the EU. [more]
3
September 25, 2019
Region:
Analyst:
The climate action package is a classic example of political compromise. It aims to support climate protection without overextending private households and companies. Criticism is perfectly justified. In the final analysis, however, the climate action package is also a reflection of the society's attitude towards climate protection: Whilst a majority of Germans support more climate protection, only a few are willing to shoulder the financial burdens. [more]
4
September 23, 2019
Region:
Improved performance in the second quarter has given European banks hope that 2019 may still end on a more conciliatory note and that longer-term prospects are not quite as gloomy as some fear. In H1, net interest income rose year-over-year, despite unrelenting margin pressure. Other revenue components were mixed, with fee and commission income disappointing again. Loans and total assets in general increased. Banks cut expenses further, while loan loss provisions picked up from record lows. In the end, profitability and capital levels remained largely stable. Once more, the transatlantic gulf in performance widened slightly, as US banks reported another rise in net income to a new all-time high. [more]
5
September 20, 2019
Region:
So far, Germany’s efforts to arrive at a more sustainable energy profile (the ‘Energiewende’) have focused on the electricity sector. However, attention is increasingly shifting towards the transport sector and its steadily rising carbon emissions. Decades-old demands, such as replacing road by railway transport, are being repeat-ed once again, even though they have been found impossible to realise. And some new concepts are being presented, such as micro e-mobility. However, their contributions to transport reform are negligible at best; they may even prove counterproductive. Ultimately, the solution is simple, if uncomfortable: long-term climate protection goals (i.e. virtual carbon neutrality) can only be reached by a considerable decline in traffic, unless technology makes significant progress. Policymakers will find it difficult to convey this message, seeing that individual mobility is one of the key concepts of a liberal society. [more]
6
September 17, 2019
Region:
Analyst:
As our planet heats up, the public debate has increasingly focused on the use of fossil fuels in the last few years, in particular coal. There is only one major exception, namely the US, whose current administration doubts that human activities are behind the climate change. German hard coal had a share of only 6% in total coal consumption in 2018. 99.9% of the lignite consumed were mined in Germany itself, namely in the Rhineland, in Lusatia and in the Central German district. A number of market observers have been skeptical about or even downright against phasing out lignite mining, mainly due to the negative impact on employment. This is probably the main reason why policymakers have decided to provide up to EUR 40 bn to support/subsidise the exit from lignite production by 2038. [more]
7
August 30, 2019
Region:
Given that in the meantime most official forecasters agree with us that the Germans will suffer at least a technical recession, even German politicians and commentators are starting to join the so far mainly Anglo-Saxon chorus, asking for countercyclical fiscal measures. In our view the government should only act if there is clear evidence that we might be at the brink of a deep recession. Despite the undoubtedly massive economic policy uncertainties we do currently not expect such a scenario. [more]
8
August 23, 2019
Region:
What should an honest and law-abiding German citizen think when their finance minister, a high-ranking representative of the state, is investigating whether he can protect them from the actions of another state body, the central bank? This is exactly what the Bavarian Prime Minister Söder is calling for: a ban on negative interest on bank deposits (up to a certain level), whose chances of realisation are now being examined by the Federal Ministry of Finance. [more]
9
July 2, 2019
Analyst:
By providing a high degree of privacy in payments, cash helps to slow the growing information asymmetry between consumers and companies as well as between citizens and public authorities. As knowledge about your counterparty is power, privacy is crucial for individuals to safeguard their position when dealing with organisations which are more powerful than a single person. [more]
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