Deutsche and Santander bosses warn against carving up banks
CUTTING big international banks down to size would not solve problems raised by the financial crisis and would create a sector unable to offer services required to support corporate clients, a top banker said yesterday.
“Size is not an end in itself and it is not necessarily evil either,” Deutsche Bank chief executive Josef Ackermann told a London conference. “The refragmentation of financial markets is in nobody’s interest… It is unlikely to bring greater stability to our markets,” he said.
Multinational firms need to be able to operate on a global scale and only large banks have the resources to service their needs and to finance big deals, Ackermann said.
“The idea that we could run a modern, prosperous economy with mid-size savings banks is totally misguided,” he said.
His comments were echoed by Antonio Horta-Osorio, the head of Santander’s British operations
He said: “It was not just big banks, there were several small and non-complex banks that failed. Small institutions can pose systemic risk.”
Ackermann also said detailed “living wills”, where banks plan for their own demise, “will be very theoretical and lead to inefficient structures”.