Further turbulence on the financial markets and a recession cannot be ruled out, warns Bafin supervisor Röseler.
(Photo: imago images/JOKER)
Frankfurt The financial regulator Bafin sees difficult times ahead for German banks. Executive Director Raimund Röseler warned in an interview with the Handelsblatt that the rapid rise in market interest rates could overwhelm several small and medium-sized institutions. “I expect a smaller double-digit number of banks to have serious problems.”
The financial institutions had granted long-term loans at low interest rates, but now had to pay more for their refinancing, said Bafin’s top bank supervisor. “Not all houses have sufficiently secured themselves against this risk.”
In addition, Röseler fears that loan defaults could rise more sharply than the banks had calculated. “The conditions for a perfect storm are there,” said Röseler. “There are high inflation rates and rising interest rates.” Further turbulence on the financial markets and a recession cannot be ruled out.
Read the full interview here:
Mr. Röseler, German financial institutions have been earning quite well recently. Does that please you as a bank supervisor?
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