Germany

Dresdner bonus ruling thankfully won’t spark trend

9 May 2012

Investment bankers at the defunct German bank have won their legal battle against Commerzbank, their rescuer in 2008, for non-payment of 50 million pounds of bonuses. It’s a depressing relic of a bygone age. Fortunately, bonus reforms since the crunch make copycat cases unlikely.

Commerzbank success is Pyrrhic victory for EBA

9 May 2012

The German lender has filled a 5.3 bln euro capital hole seen by Europe’s banking regulator in December. But Commerzbank’s solution has largely come via balance sheet tweaks rather than by raising new equity. It will do little to improve investors’ shaky confidence in the sector.

Let Germany inflate while others deflate

8 May 2012

The Bundesbank is worried about a possible loosening of the ECB’s monetary policy. That’s not on the cards, but should be. Additional central bank support might push German inflation above the euro zone average - but the differential would help rebalance the European economy.

Europe would welcome higher German wages

30 Apr 2012

Higher German consumption and more expensive exports would help balance the euro zone. Industrial action in favour of a 6.5 percent pay rise, and talks about a nationwide minimum wage, should please Berlin’s partners. But they shouldn’t hope too much, for now.

Deutsche and Barclays’ fortunes could yet converge

26 Apr 2012

The UK lender’s investment bank outpaced its German rival in the first quarter. But Deutsche Bank is in deleveraging mode, while Barclays’ risk-weighted assets actually rose. Capital challenges and mutual vulnerability to a misfiring euro zone could yet spoil 2012 for both banks.

Ducati could rip it up with VW

16 Apr 2012

The premium motorbike maker would add a little extra machismo to VW’s growing convoy of brands. A mooted $875 mln price tag is appropriately red-blooded, at nearly twice revenue. Cost savings would be limited. But perhaps VW could turbo-charge sales in newer markets.

Wage happy Germany may worsen euro zone divide

4 Apr 2012

As most of Europe cuts wages, Germany is letting them rise. The economic powerhouse can afford the generosity and its growth will benefit. Periphery exports may get a bit of a boost but if German inflation leads to tighter monetary policy, the zone’s divisions will get worse.

UK government faces tough N-power choices

2 Apr 2012

Two German utilities’ withdrawal from Britain’s Horizon nuclear project is a blow to the government’s clean energy ambitions. It needn’t be a fatal one, but policymakers face some politically unappetising choices if they want new nuclear capacity to be built.

Europe can learn to live with German inconsistency

29 Mar 2012

Berlin seems ready to expand Europe’s bailout fund, while the Bundesbank keeps criticising the ECB’s liquidity splurge. Germany is seeking to balance economic pragmatism and monetary intransigence. Yet this need not obstruct the debate about reviving economic growth.

Bertelsmann’s IPO groundwork signals new ambition

28 Mar 2012

The new CEO of the German media group is making his mark, changing its structure to enable a float without immediately compromising family control. There’s also a new urgency to finding sources of growth. Equity-financed M&A seems likely to be the eventual outcome.

Europe needs to ease on firewall obsession

26 Mar 2012

Euro zone members may agree this week on beefing up their rescue fund. But throwing money at the crisis won’t solve it. A bailout of Italy and Spain would be tricky, however big a firewall. And Italy’s crisis last year shows that market forces may be more efficient than bailouts.

Splitting AT&T CEO and chairman roles a no-brainer

13 Mar 2012

Randall Stephenson’s botched plan to buy T-Mobile USA came with a $4 bln tab. The board didn’t see fit to hold him accountable with his pay package. But shareholders can have their own say - and should vote to strip Stephenson of his chairman title and install an independent.

Big pharma needs new compact with emerging markets

13 Mar 2012

India has joined Thailand and Brazil in granting a licence to a generic drugmaker at the expense of a global player. The likes of Bayer will protest but a compromise – with multinationals obliged to take a price hit in return for continued patent protection – is probable.

Investment bankers complete Deutsche Bank takeover

8 Mar 2012

The latest management reshuffle at the German-based group has elevated several investment bank executives. That’s partly new co-CEO Anshu Jain picking his own team. But it’s also confirmation that, despite the crisis, trading and risk management nous are still crucial.

Ackermann sings a pained Deutsche swansong

2 Feb 2012

The German lender’s boss has built an investment banking powerhouse during his decade at the helm. But his last set of quarterly results are poor, the bank has a capital hole to fill and the long-term share price performance leaves little to write home about.

EU must learn to cope with new German leadership

30 Jan 2012

Berlin will get the euro fiscal treaty it wants, and even Nicolas Sarkozy is using Germany as an example for French reforms. The euro zone has to get used to the new regime. The shock over the tough German line on Greece shows adjustments are needed - from both sides.

Commerzbank bonus case is echo of a greedier era

25 Jan 2012

More than 100 ex-Dresdner bankers are heading to court over a 50 mln euro bonus promise. The case tests whether Commerz was entitled to slash payouts after buying the ailing German lender. But even if staff win, new rules on guarantees and clawbacks make future claims harder.

Commerzbank Houdini act tests regulators’ resolve

19 Jan 2012

The German lender thinks it can conjure up 6.3 bln euros of capital to meet the European Banking Authority’s target. Fiddling with regulatory ratios isn’t the same as injecting fresh equity, but the EBA lacks the power to intervene. That won’t help confidence in Europe’s banks.

Stalling German motor is Europe’s other difficulty

16 Jan 2012

Germany the strong? Well, yes, fiscally. It was not downgraded by S&P because its fiscal deficit is just 1 percent of GDP. But German growth has stalled again. It depends too much on exports. The irony is that the EU’s biggest economy can’t propel itself – or the euro zone.

Time to think small in stock exchange M&A

10 Jan 2012

If Brussels vetoes Deutsche Boerse’s merger with NYSE, the deal will join Australian and Canadian takeovers on the scrapheap. Exchanges battling legal change and weak markets could use merger-led cost cuts. But from now on big deals will be the exception, not the rule.