Deutsche Bank’s current turmoil is the epitome of the European banking sector troubles, said Gildas Surry, senior research analyst at Axiom Alternative Investments and manager of the Axiom European Financial Debt fund.
He assessed the sector went through crisis unscathed but got caught in the complexity of European regulations and the unpredictability of US litigations.
According to Surry, German banks are the losers of the ECB’s quantitative easing.
“QE imposes negative rates and flat yield curves on banks. Transformation activity from deposits to lending becomes less profitable,” he commented.
Axiom’s manager compared Deutsche Bank to a long distance runner whose steps trip on the finish because the organisers haven’t been able to organise themselves.
“High time European regulators defended their banks rather than competing between themselves to always ask more from the banks,” he concluded, assessing that European banks were sacrificed on the altar of regulations.