 "Averting another Great Depression has come with a price, says Deutsche's Jain")
A resolution to the problems engulfing Europe and its debt crisis will be found, Deutsche Bank’s co-CEO designate said on Thursday, though the path toward finding an outcome are laden with risks and uncertainty.
“We are therefore positive that a resolution will be found, but there is real risk of an accident in the meantime, and the path will be uncertain and markets will remain volatile,” Anshu Jain, the German lender’s global head of the corporate and investment bank, said in prepared remarks at Deutsche Bank-sponsored conference in Singapore.
Jain, who was making his first speech since being named co-CEO from next year, said the euro’s problems were making investors more careful about lending to the region’s banks.
“A failure to resolve the current crisis expeditiously has led investors, including the prime US money funds, to take a more cautious attitude towards their funding of European banks,” he said.
Jain, wearing a dark suit, white shirt and a checkered tie, noted that the financial industry is in the second phase of the crisis that began in 2008.
“It is clear that the authorities have done a tremendous job averting the risks of the Great Recession turning into the Great Depression. But this has come at a price. I believe we are now in the second phase of the crisis - as the pressure moves from the private to the public sector.”
Credit rating agency Standard & Poor’s on Wednesday warned that a widening of the European debt crisis could have severe consequences for German banks.
Deutsche Bank’s current CEO Josef Ackermann said recently that if the weaker market activity seen in August continued in September and October, the bank would have to think about job cuts.
In the latest blow to European banking sector, Moody’s Investors Service on Wednesday downgraded two of France’s top banks, Societe Generale and Credit Agricole.
France’s lenders- two of which own local banks in Greece - have the highest overall bank exposure to Greece, according to the Bank for International Settlements.
Deutsche Bank’s shares are down 40 percent in 2011, undeperforming a 36 percent drop in the STOXX 600 European banking index.
Reuters
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