Rates put Germany’s financial ecosystem at risk

Andreas Dombret, Bundesbank

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Days after the ECB’s March announcement of more quantitative easing and deeper negative rates, Germany’s public-sector savings banks vented righteous fury when announcing some worrying annual results. 

The ECB’s actions were wrong, dangerous and useless, according to Georg Fahrenschon, president of the German savings banks’ association, the DSGV.

“[It] was a black day for the asset base of our population and for a sustainable financial policy,” fumed the Bavarian stalwart of chancellor Angela Merkel’s CDU party.

It is not surprising to see a German politician expressing anger at European economic policies that favour stimulus for southern Europe over his own country’s stability and the interests of German savers. But those that hold power in the public-sector banks might have their own networks of banking patronage to blame.

The ECB’s policies are certainly dangerous for the myriad of municipality-owned savings banks, or Sparkassen, that Fahrenschon represents.