If only financial crises were more discriminate in the havoc they wreak. Unfortunately for Germany, the downturn has had scant regard for economic justice: the prudent savers and the hard workers have seen their economies savaged with vigour that is almost indistinguishable from what has been witnessed by the spendaholic Anglo-Saxons. The last 12-18 months have illustrated the full extent of how interconnected financial markets have become, for better or worse. The vulnerability for the Germans has been their reliance on the export sector to...Read more
To purchase printed copies or a PDF of this report, please email leonie.welss@lseg.com and shahid.hamid@lseg.com
Germany’s sovereign debt, traditionally the strongest in Europe, has been largely unscathed by the economic downturn, enabling it to retain its preferred status with investors. However, in some ways the strength and importance of Germany has had negative consequences, not just for Europe generally but even for German guaranteed agencies. Mike Winfield reports.
The German Pfandbrief market is facing tough competition from a relatively new kid on the block: state guaranteed bank bonds. This, coupled with continued aversion to bank risk in general, has prompted a serious decline in jumbo covered bond issuance. But, dig a little deeper and figures show that this asset class is actually still providing a stable source of refinancing for German banks. Rachelle Horn reports.
In keeping with the wider European theme, the German syndicated loan market reported a difficult first quarter in 2009 with volumes significantly lower than at the same point last year. However, with signs that worst could be over for the financial sector bankers next quarter could see an upturn of activity. David Cox reports.
After a period of relative resilience throughout 2008, activity in Germany's equity capital markets has virtually ground to a halt in 2009, with the high expectations of the start of the year proving to be seriously overblown. Nevertheless, there is some optimism for the second half, as Chris Vellacott reports.
The German auto asset-backed securitisation market had been the last bastion of primary supply in Europe until the collapse of Lehman Brothers closed the market. Since then auto makers have explored, with measured success, alternative funding routes. But with vehicle sales likely to fall amid increasing consumer pressure, the outlook for publicly placed ABS deals looks challenging. William Thornhill reports.
It remains unclear if a new disclosure regime for contracts for difference will come together in Germany as has happened in the UK. Some industry officials continue to argue that if Germany had had in place a CfD disclosure regime similar to the one about to take hold in the UK, last autumn’s Volkswagen and Porsche incident might not have happened. Jean Haggerty reports.
Germany, along with many other countries, has been wrestling with the idea of establishing “bad banks”, to free its existing financial institutions of the distressed assets they have accumulated on their balance sheets, and, in so doing, hopefully revive banking activity. Dr. Klaus Grossmann, partner at Reed Smith, outlines the latest thinking of the German government.