The International Monetary Fund warned that its financial stability reported low cash banks in Europe with primitive business models posed a threat to our current financial system.
At a news conference held to discuss financial stability worldwide, fund officials found no mendable solution at the moment. “The focus of investors has shifted from the level of capital to the business model, and that is why banks are under pressure,” said Peter Dattels, deputy director in the I.M.F.’s capital markets division.
In the research report, economists argued that the issues with European banks were at an anatomical level, low capital, troubled loans and weak business models that no longer generated revenue with negative interest rates are of concern.
Regulators and economists argue that Deutsche Bank poses a large risk than its counterparts in Europe and the US. On Tuesday Mr. Gabriel (German politician who leads the minority party in Chancellor Angela Merkel’s coalition government) said to reporters, “I don’t know whether to laugh or be angry that the bank that declared speculation to be its business model now declares itself a victim of speculators,”.