A “delicate recession” is at the playing cards, in keeping with Commerzbank CEO Manfred Knof.
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Commerzbank CEO Manfred Knof says the financial institution has ready for an uplift in nonperforming loans, however the scenario is “indisputably now not a crisis or default factor” as a “delicate recession” is most probably within the playing cards.
“We now have already made provisions however nonetheless these days we do not see numerous problems forward folks,” Knof instructed CNBC’s Annette Weisbach on the Eu Banking Congress in Frankfurt Friday.
Nonperforming loans are financial institution loans more likely to be repaid overdue or now not in complete and are sometimes called “dangerous debt.”
“We’re taking a look ahead to an overly strong and excellent end result subsequent 12 months,” Knof stated.
Different predictions for Europe’s financial outlook have now not been as constructive. The manager economist at Berenberg, Holger Schmieding, instructed CNBC that shopper self belief had “plunged so badly that the recession will most probably now not be shallow.”
‘Resilient and powerful’
The Commerzbank CEO additionally stated the movements of regulators, politicians and company banks have established “optimism” that the sphere can arrange the present financial setting.
“We will be able to have two tough years forward folks however we’re resilient and powerful. [If] all of us paintings in combination we must be [able to] take care of the placement,” he stated.
The manager of Deutsche Financial institution Christian Stitching used to be extra frank in his feedback about law in Germany and Europe extra extensively, announcing he used to be involved that “the pendulum is set to swing too a ways” and may “structurally drawback” the trade amongst world competition.
“The present regulatory framework does little to fortify Eu banks,” he stated, talking on the similar tournament Friday. “As a substitute of additional increasing and tightening, we must additionally have a look at the place it will have long past too a ways.”
He added that whilst Europe is recently a pacesetter in sustainable finance, the bloc “will quickly lose this management” if law “continues because it has.”