FRANKFURT, Nov 18 (Reuters) – Deutsche Bank ( DBKGn.DE ) Chief Executive Christian Sewing on Friday warned of the “dangers” of Europe’s reliance on foreign banks, likening the threat to the region’s dependence on outsiders for energy that has sparked a crisis on the continent. that.
Deutsche Bank has long warned that Europe needs strong banks to take on US and Chinese rivals, but Friday’s speech took on a more urgent feel.
“We need to quickly change course here if we don’t want to rely primarily on foreign banks to finance Europe’s future,” Sewing told a banking conference.
“And no one should take this danger lightly,” he said.
Jahitan blamed European regulators for heavy-handed action, the latest criticism by a top banker of its supervisor.
“It is becoming increasingly clear that the current regulatory framework does little to strengthen European banks,” he said.
Stitches praised regulators for stronger oversight that helped the industry after the financial crisis more than a decade ago.
“The issue that worries me is that the pendulum will swing too far,” he said. “We should also look at where (regulations) may have gone too far,” he said.
One area Jahit specializes in with “significant barriers” erected by regulators is so-called leveraged finance.
European Central Bank supervisors have told banks to reduce leveraged financing where credit is given to borrowers who are already in debt.
Jahitan said the business was a “legitimate segment that will play an important role in the wider economic recovery”.
Reporting by Tom Sims and Marta Orosz Editing by Miranda Murray and Mark Potter
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