Deutsche bank says ‘mis­trust’ of Spain, banks un­jus­ti­fied

The Pak Banker - - Front Page -

MADRID: In­vestors' mis­trust of Spain is un­jus­ti­fied and prob­lems in the bank­ing in­dus­try are "man­age­able," Deutsche Bank AG Chief Ex­ec­u­tive Of­fi­cer Josef Ack­er­mann said, as Europe's debt cri­sis in­ten­si­fied. The fun­da­men­tal eco­nomic data "in no way jus­ti­fies the ap­par­ent mis­trust that ex­ists in the case of Spain, though not only there," Ack­er­mann, who also heads the In­sti­tute of In­ter­na­tional Fi­nance, a global in­dus­try group with more than 400 mem­bers, said. "Spain can deal with its prob­lems by it­self."

Ire­land's agree­ment to an 85 bil­lion-euro ($111 bil­lion) bailout by the Euro­pean Union and In­ter­na­tional Mon­e­tary Fund hasn't al­layed con­cern the bloc's sov­er­eign-debt cri­sis will spread to Por­tu­gal and Spain. The EU and IMF es­tab­lished a 750 bil­lion-euro fund in May af­ter Greece's near-de­fault threat­ened the sur­vival of the euro. "The trou­ble is the mar­kets can cre­ate their own prob­lems, whether there is any jus­ti­fi­ca­tion or not," said Peter Thorne, a London-based an­a­lyst at Helvea Ltd. "The role of a banker is to be calm and cool and down­play prob­lems."

Span­ish and Ital­ian govern­ment bonds fell yes­ter­day, driv­ing the ex­tra yield in­vestors de­mand to hold the se­cu­ri­ties in­stead of Ger­man bunds to euro-era records. The cost of in­sur­ing debt for Spain, Italy, Por­tu­gal and Ire­land surged to records yes­ter­day, stocks and the euro slid. Spain "has a di­ver­si­fied, dy­namic econ­omy and the govern­ment deficit is rel­a­tively mod­er­ate," Ack­er­mann said. -PB News

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