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Financial regulator sees stormy waters ahead for Germany
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BERLIN (Reuters) – Germany’s financial sector is facing an uncertain future amid the energy dispute with Russia, the head of the country’s financial regulator BaFin said in a newspaper interview published on Wednesday.
BERLIN (Reuters) – Germany’s financial sector is facing an uncertain future amid the energy dispute with Russia, the head of the country’s financial regulator BaFin said in a newspaper interview published on Wednesday.
“I do not see an acute short-term threat to financial stability – but ask me again in three to six months. Then things may look different,” BaFin president Mark Branson told the Sueddeutsche Zeitung.
He warned that an energy crisis would impact the entire German economy, as fears mount that Russia could throttle its gas exports to the country even further.
“The state cannot absorb it all,” Branson said.
The financial watchdog chief pointed to banks struggling with loan defaults but said that for now the financial system was robust.
“Banks have much more capital than they used to as a loss buffer.”
(Writing by Rachel More, editing by Kirsti Knolle)
Financial stability refers to a condition where the financial system operates effectively, with institutions able to withstand economic shocks without significant disruptions to the economy.
Loan defaults happen when a borrower fails to make required payments on their loan, which can lead to financial losses for lenders and impact the overall financial system.
Banks play a crucial role in the economy by providing financial services such as accepting deposits, offering loans, and facilitating transactions, which supports economic growth.
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