Deutsche bank says ‘mistrust’ of Spain, banks unjustified
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