Many German banks had their fingers badly burnt in the financial crisis, having disastrously expanded into areas such as Spanish real estate and global shipping. As a result, the country's private banks, sparkassen and landesbanken have largely reverted to type, happy with unspectacular but predictable growth in an oversaturated domestic market.
Caught up in European regulation, Germany’s public banks are trying to adapt to new challenges. Across all three banking pillars in the country, financial institutions are particularly struggling with increased competition in retail banking and low profitability.
Unlisted white goods manufacturer Bosch und Siemens Hausgeräte chose an unregulated Frankfurt market to launch its debut Eurobond issue targeting institutional investors only. Despite the unusual approach, the deal was more than twice oversubscribed.
European securities will soon be settled on a central IT platform – Target2 Securities (T2S) – as part of the European Central Bank's initiative to harmonise post-trade standards. With the first wave of implementation scheduled for 2015, Duygu Tavan investigates how the T2S project is progressing and its consequences for the securities industry.