A “delicate economic downturn” is on the cards, according to Commerzbank CEO Manfred Knof.
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Commerzbank CEO Manfred Knof states the financial institution has organized for an uplift in nonperforming loans, but the circumstance is “unquestionably not a disaster or default issue” as a “moderate recession” is most likely in the playing cards.
“We have presently created provisions but nonetheless at the instant we do not see a lot of difficulties ahead of us,” Knof advised CNBC’s Annette Weisbach at the European Banking Congress in Frankfurt Friday.
Nonperforming loans are lender financial loans possible to be repaid late or not in comprehensive and are also acknowledged as “bad debt.”
“We are on the lookout ahead to a quite steady and very good consequence upcoming year,” Knof said.
Other predictions for Europe’s economic outlook have not been as optimistic. The chief economist at Berenberg, Holger Schmieding, advised CNBC that shopper confidence had “plunged so terribly that the economic downturn will possible not be shallow.”
‘Resilient and strong’
The Commerzbank CEO also claimed the steps of regulators, politicians and company financial institutions have proven “optimism” that the sector can take care of the existing financial atmosphere.
“We will have two hard many years ahead of us but we are resilient and potent. [If] we all operate together we really should be [able to] deal with the problem,” he reported.
The main of Deutsche Bank Christian Stitching was additional frank in his remarks about regulation in Germany and Europe more extensively, indicating he was worried that “the pendulum is about to swing as well far” and could “structurally disadvantage” the market among world wide rivals.
“The present regulatory framework does little to strengthen European banking institutions,” he said, speaking at the identical event Friday. “Rather of further more increasing and tightening, we must also look at wherever it could possibly have long gone way too significantly.”
He extra that when Europe is at this time a chief in sustainable finance, the bloc “will soon drop this leadership” if regulation “carries on as it has.”