FRANKFURT (dpa-AFX) - Deutsche Bank's (DB) Chief Executive Officer John Cryan called for an end to the era of cheap money in Europe, and said that the company is now seeing signs of bubbles in more and more parts of the capital market where it wouldn't has expected them. At a conference in Frankfurt, John Cryan said he welcomed the recent announcement by the Federal Reserve and now also from the ECB that they intend to gradually bring their loose monetary policy to an end. The central banks must, however, plot a middle way that averts massive losses on the markets.
Cryan said, 'There is no disputing that cheap money has helped the financial markets, individual countries and, of course, us banks to emerge from the financial crisis. Loose monetary policy, however, is also causing ever greater upheavals. It is not only sovereign bond yields that are close to historically low levels - the same is true for high-risk bonds.'
Cryan said, 'US banks enjoy a competitive advantage due to the local interest rate environment. In the first half of 2017 alone the net interest income of US banks rose by eight percent - in Europe, by contrast, it fell by two percent. We at Deutsche Bank had access to over 285 billion euros of liquidity at the end of the second quarter, because we are now receiving huge cash inflows. This money, which actually constitutes the strength of a bank, is costing us penalty interest.'
Copyright RTT News/dpa-AFX