German banks 'not immune' to eurozone crisis

29 June 2012

German banks could still be drawn into the eurozone crisis.

Dr Mechthild Schrooten, professor of economics at Bremen's University of Applied Sciences, told the Irish Times that the bigger institutions in the nation are facing problems, but no one likes to talk about it.

"It is not clear how big a banking problem there is, I wouldn't even want to begin to guess, but it has a lot of zeroes," he added.

Throughout the economic crisis, Germany has been seen as the strongest country in the single currency and has headed up discussions about bailouts for other states.

However, Dr Schrooten's comments may cause some doubt about just how resolute its own banking sector is.

Most of the concern is over the Landesbanken, which is a group of state-owned banks.

Fears are rife that these lending institutions may have overstretched themselves by stepping away from their core business of providing loans to small and medium-sized enterprises.

By Tony Aynsley

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development