The probable merger between the major German banks Commerzbank and Deutsche Bank is not a good idea at all. That is what the German economist Isabel Schnabel says. She strongly rejects a merger of the two major German banks. Schnabel is one of the advisers to the German government.
According to Schnabel, Germany does not benefit from an even larger bank. Cost savings at the merged bank will, according to her, be difficult to achieve. She also doubts whether a merger makes good business sense and how a merger works out for the “implicit state guarantee”.
The merging of Commerzbank and Deutsche Bank would create a Moloch with 1800 billion euros in assets. It would be the number three in Europe after the British HSBC and the French BNP Paribas. Critics point out that this would make the bank too large to fail. The two German banks are not looking too bright.
A possible merger of financial institutions has been around for months. The German Finance Minister Olaf Scholz (SPD) and his State Secretary Jörg Kukies have previously said that Germany needs strong banks and that the government is open to ‘economically meaningful options’.
Kukies previously worked for Goldman Sachs in Germany. The fact that it is precisely the Americans who are designated to supervise the merger talks is against the sore leg of various members of parliament. They blame the State Secretary for Conflicts of Interest. Trade unions fear that a merger will eventually lead to the cancellation of tens of thousands of jobs.
Chancellor Angela Merkel previously pointed out that it is up to the banks themselves to decide on a possible merger, even though Germany holds around 15 percent of the Commerzbank shares. According to Merkel, who does not want to take a position, it is a relatively small interest and a private decision by the banks themselves. She awaits the results of the conversations.