Commerzbank chief states he’s not getting ready for catastrophe, however moderate economic crisis

Commerzbank CEO Manfred Knof states the bank has actually gotten ready for an uplift in nonperforming loans, however the circumstance is “definitely not a disaster or default issue” as a “mild recession” is most likely in the cards.

“We have already made provisions but still at the moment we don’t see a lot of issues ahead of us,” Knof informed CNBC’s Annette Weisbach at the European Banking Congress in Frankfurt Friday.

Nonperforming loans are bank loans most likely to be paid back late or not completely and are likewise called “bad debt.”

“We are looking forward to a very stable and good result next year,” Knof stated.

Other forecasts for Europe’s financial outlook have actually not been as positive. The primary financial expert at Berenberg, Holger Schmieding, informed CNBC that customer self-confidence had “plunged so badly that the recession will likely not be shallow.”

The Commerzbank CEO likewise stated the actions of regulators, political leaders and business banks have actually developed “optimism” that the sector can handle the present financial environment.

“We will have 2 challenging years ahead of us however we are resistant and strong. [If] all of us collaborate we need to be [able to] manage the circumstance,” he stated.

The chief of Deutsche Bank Christian Sewing was more frank in his remarks about policy in Germany and Europe more extensively, stating he was worried that “the pendulum is about to swing too far” and might “structurally disadvantage” the market amongst worldwide rivals.

“The current regulatory framework does little to strengthen European banks,” he stated, speaking at the very same occasionFriday “Instead of further expanding and tightening, we should also look at where it might have gone too far.”

He included that while Europe is presently a leader in sustainable financing, the bloc “will soon lose this leadership” if policy “continues as it has.”