http://www.fpmi.de/ en Thu, 22 Jul 2010 11:14:34 +0200 TYPOlight webCMS Taxes on financial transactions require international-level consultations

Munich Financial Center Initiative (fpmi) has come against the introduction in Germany of a tax on financial transactions that has not undergone a process of international consultation. The failure to undertake this would lead to the G-20 countries’ taking a variety of approaches. This, in turn, would cause Germany’s business community and private investors and other citizens to experience disadvantages. It would not, however, achieve the objective envisioned by Germany’s government of putting an end to the machinations of “international-level speculators and other parties responsible for the crisis being experienced by financial markets.” FPMI has, however, come out in favor of the German government’s ban on naked short selling, with the initiative calling it a “comprehensible step.” A much more productive approach would be, however, to institute such measures on the Europe-wide level, at the very least.

The fact that it is apparently not possible to get such a tax on financial transactions approved on the international level makes the German government’s new measure quite surprising. The only way, after all, of precluding evasions and distortions of competition is by promulgating this tax on a global level. This would ensure its having identical effects in each financial market. The failure over the last 30 years to achieve this global-level consensus has kept this tax from being instituted.

This failure will cause financial players to undertake their transactions in centers not subject to this tax, with all of the resultant relocations of operations and thus of staff members—as pointed out in the in-depth position paper (in german) released by fpmi in February 2010.
 
Compiled by fpmi’s experts, this position paper contains a number of other important points. These continue to apply. Rather than affecting the banks, the tax encumbers the state and the business community as a whole by increasing the former’s costs of capital procurement. This, in turn, increases the state’s expenditures, curtailing its room to maneuver and economic growth in the process. The tax will also have a detrimental affect on Germans’ private provisions for old age, as the tax will reduce the proceeds capable of being produced by such plans.

A further key point is that the tax will not change the methods of speculation used by a number of market players. The tax will, rather, cause the speculators to undertake such practices in other areas, facilitating and expediting them in the process.

Getting other EU member countries involved in banning short selling

FPMI views, on the other hand, the banning of naked short selling as being a measure that will stabilize markets. Another positive effect: it is an unmistakable sign of the German government’s strong resolve in this area. The initiative does, however, regard the obvious lack of international coordination as being worrisome. This lack mandates the German government’s pushing for the other EU member countries’ following suit. This would then form the basis of an EU-wide ban on naked selling.]]> http://www.fpmi.de/en/press/press-release/article/items/fpmi-hails-ban-on-naked-short-selling.html Fri, 21 May 2010 15:15:00 +0200 http://www.fpmi.de/en/press/press-release/article/items/fpmi-hails-ban-on-naked-short-selling.html The enacting of a bank levy is being discussed in Germany. Munich Financial Center Initiative (known by its German abbreviation of “fpmi”) has taken the position that this enactment has to adhere to a range of stipulations. A failure to promulgate these would give rise to a credit crunch or to tilted playing fields for Germany’s banks. FPMI is also calling for the levy’s containing adjustments for risks and individual institutions. These points are contained in fpmi’s position paper, whose provisions include:

1.    To ensure the maintenance of a single EU-wide market for financial services, this special levy on banks has to be undertaken by all of the Union’s member states. The enactment of this measure has to be coordinated with efforts being undertaken on the G-20 and other international levels. To be avoided at all costs is Germany’s going it alone.

2.    The levy has to be configured to account for risks and individual conditions. These criteria for the imposing of financing requirements include the business model being employed by the bank in question, its spread of risks, and the perils it poses for national and international financial systems. A requisite is to ensure that derivatives entered into as hedges are excluded from the risk-related items.

3.    Requisite is also ensuring that the expenditure of the moneys paid into the stability fund and the capital earnings yielded from that be for the purposes foreseen for them, such as the financing of future restructuring and settlement measures involving major banks or the stabilization of the financial system as a whole.

4.    Needed to be established is the extent to which payments into deposit and institution security systems could be taken into account when setting the bank levy.  Double encumbrances are to be precluded.

5.    Also to be taken into account when setting the level of the bank levy are the effects of other measures fostering the stability of banks that have been enacted, or are planned, or could be forthcoming. This particularly pertains to the increasing of the core capital/equity ratio imposed by banking supervision authorities, and the possible negative effects such might have on bank’s abilities to sustain operations and the provision of loans. Requiring ongoing monitoring, the latter capability has to be maintained to the extent enabling banks to adequately meet their responsibility of providing financing to their business communities.

6.    The levy on banks cannot be a one-shot measure. Rather, it has to form a component of a wide-ranging improvement of the code of international banking and financial market regulation.]]> http://www.fpmi.de/en/press/press-release/article/items/fpmi-publishes-position-paper-on-bank-levy.html Fri, 07 May 2010 15:15:00 +0200 http://www.fpmi.de/en/press/press-release/article/items/fpmi-publishes-position-paper-on-bank-levy.html Renowned speakers and anything-but-small talk among and with financial high-potentials and experts: this lively mix characterized the second fpmi inside. Held on April 22, 2010, the get-together featured a kickoff speech by Alois Müller, president of the Munich office of the Deutsche Bundesbank.

The first fpmi inside was held on November 2009 by Munich Financial Center Initiative (which is known by its German abbreviation of “fpmi”). The get-together was attended by the high potentials and experts dispatched by their financial companies’ executive or managing directors to attend it. April’s event followed the same format. It was held on the premises of the Munich Stock Exchange, which are located on Munich’s Karolinenplatz square. Some 80 guests were in attendance.

The evening was kicked off by words of welcome from Christine Bortenlänger, speaker of fpmi and member of the managing board of the Munich Stock Exchange, and by a lecture from Alois Müller on “Monetary policies: the challenges to be mastered in the crisis”. In her talk, Bortenlänger had cited several of the many opinions on this subject. The opinions’ common denominator: the view that monetary policymakers had faced challenges of an import last seen in the 1903’s. Müller preferred to see the policymakers as having dealt with a “great responsibility”. Comprising the resorting to “unusual measures” by the Eurosystem and other central banks, their efforts had led to a substantial regaining of stability on financial markets and in economies as a whole. The still-large encumbrances and recognizable risks for Germany’s economy should, however, neither be overlooked nor not dealt with, stated Müller.

The crisis is now showing signs of coming to an end. Müller made it clear that this has to be accompanied by a halting of these extraordinary monetary policies. Of key importance is finding the right time for doing such. “It can’t be too early – or too late.” Müller cited an important step towards normalcy as being the relaunching of the past’s interest rate tenders.

Müller expounded upon two hotly-discussed issues that had emerged in the wake of the crisis. He doesn’t see any thoroughgoing proof of the much-feared credit crunch’s actually existing. He views a number of the ideas being discussed as to how to improve the regulations applying to banks as “making sense”. Earning his praise was the concept of increasing banks’ capital backing.

“Differences within the USA are greater than those in the Eurozone”

The discussion following Müller’s talk centered around the current situation in Greece and its ramifications. The question was raised as to whether the crisis was caused by the failure to have a single set of financial policies’ accompanying the institution of a single currency. Müller’s response was to describe the currency union as being a net benefit for Germany. Had the euro not become the currency of Greece, there would have been upward pressures upon the D-Mark’s rates of exchange. This would have had a negative effect upon the country’s economy. The true cause of the crisis is that such countries as Greece or Portugal have failed to make use of the advantages accruing to their economies from the currency union. While viewing the Eurozone as not constituting an optimal currency union, Müller described the USA as also showing deficiencies in this area. “The differences existing within USA are, in some cases, greater than those in the Eurozone.”

The question was then raised as to which instruments could be availed of by such underperforming countries in the Eurozone to replace rates of exchange and of interest in dealing with laggings in productivity and competitiveness. Müller’s response was to accord a high priority to the labor market. He views the instituting of a system of financial compensation as not being feasible. The only way to make up for these divergences is the undertaking of in-country readjustments, even in those cases in which such processes proved painful. Müller was asked as to his prediction as to the course of development of the euro-dollar rate of exchange. His response was brief. It’s not a subject on which he had anything to say, as no predictions had any particular likelihood of coming true.

The discussion on monetary policy, Greece and rates of exchange was set forth during the ensuing reception, at which the get-together’s participants busily pursued their networking and exchangings of views.

Christine Bortenlänger, the get-together’s hostess, was highly satisfied with it. “The get-together brought together Munich’s leading experts on monetary policies and many of our city’s high potentials. The ensuing talks, discussions and networking detail the vitality and viability of fpmi inside,” she concluded.
]]> http://www.fpmi.de/en/press/press-release/article/items/an-evening-of-monetary-policies-and-networking-at-fpmi-inside.html Wed, 05 May 2010 10:00:00 +0200 http://www.fpmi.de/en/press/press-release/article/items/an-evening-of-monetary-policies-and-networking-at-fpmi-inside.html Munich Financial Center Initiative (known by its German abbreviation of fpmi) is calling for the enactment of legislation leading to an improvement of the quality of the services provided and brokered by investment consultants. These are currently required only to secure a permit to conduct business, as stipulated by § 34c of Germany’s Commercial Regulations. This enactment would remedy the lack of trust now shown by investors in such consultants.

The lack of trust plaguing financial markets has amply shown the importance of investment consultants’ having the requisite qualifications and track records. Such traits and demonstrable accomplishments are especially important for those consultants dealing with products stemming from unregulated capital markets. These were already facing a lack of trust in the pre-crisis days, in which a number of investors suffered serious losses on them. These products are being sold in Germany by consultants whose qualification is the possessing of a permit to conduct business, a stipulated by § 34c of the country’s Commercial Regulations. This is in contrast to the situation prevailing in the insurance sector. In this area, the Regulations (§ 34d) stipulate that brokers have to furnish proof of technical expertise and of professional liability insurance.

FPMI sees this situation as requiring changing. The Initiative is therefore calling for enacting the requirements that investment consultants possess proof of trade expertise and of professional liability insurance. The latter is to have a preset minimum amount of coverage. Other requirements to secure approval for being admitted as a dealer on the unregulated markets should be demonstrable reliability and sound finances.

Verification of professional proficiency under the auspices of a public sector body

The stipulations of these new regulations can avail themselves of existing codes and established structures. Capable of emulation, for instance, is the verification of professional expertise stipulated in the Insurance Brokerage Act and undertaken under the auspices of a public sector body. The test itself can use the components of examinations leading to the securing of such qualifications as investment funds specialist, consultant on financial services, and specialist for financial consulting.

To ensure the highest level of efficiency, the responsibility for the approval process and for the registry of brokers should be entrusted to a single authority. The insurance industry offers, once more, a role model. Its authority is responsible for managing itself.

A must, according to fpmi, is customers’ being provided with access to the certifications of the investment brokers’ expertise. This, in turn, entails the registration of the brokers in a central register. This would be maintained in the Internet. Doing such would provide unrestricted and easy access to the register. Investment brokers often offer both insurance and capital investment products (for instance: mutual funds). This fact mandates the creation of a single register. It could be an adaptation of the existing register of insurance brokers.

]]> http://www.fpmi.de/en/press/press-release/article/items/fpmi-calls-for-rules-governing-investment-consultants-serving-unregulated-capital-markets.html Wed, 28 Apr 2010 10:00:00 +0200 http://www.fpmi.de/en/press/press-release/article/items/fpmi-calls-for-rules-governing-investment-consultants-serving-unregulated-capital-markets.html Munich Financial Center Initiative (known by its German abbreviation of fpmi) has voiced its support of the proposed stiffening of the regulations applying to the capital backing possessed by banks. fpmi expects the new regulation to lead to an increasing of the banks’ core capital, and thus of their risk reserves as well. The net result of the regulation will be an augmenting of financial markets’ stability. To further this objective, fpmi is calling for the retention and expansion of the instruments facilitating the creation of core capital. A failure to do such would give rise to the peril of a credit crunch.

fpmi is advocating undisclosed reserves’ being continued to be permitted to be recognized by all banks as being a component of core capital. The Basel Committee for Banking Supervision takes an opposing view; this is regarded by fpmi as being counterproductive. There are no practical reasons for treating the undisclosed reserves held by Landesbanken (state-level publicly-held banks) owned by the public sector in ways differing from those accorded to Landesbanken whose corporate form is that of a joint stock company (AG). The determinant of incorporation should be the quality of the capital instrument and not the legal form of its issuer.

At the very least, grandfather provisions should be maintained. The way for achieving this is shown by the EU’s regulations on hybrid capital. These take effect at the beginning of 2011. Supported by fpmi, these stipulate that legacy issues not fulfilling the stipulations of the new regulation are to be accorded complete protection through grandfather provisions for the first ten years after promulgation of the new act. This protection will be lessened on a step-by-step basis until 2040.

As part of its consolidation of banking supervision, the Basel Committee has proposed enacting the asymmetrical elimination in core capital of stakes held by minority interests in subsidiaries, while retaining the full incorporation of risk-bearing items maintained in these subsidiaries’ balance sheets. fpmi rejects this proposal, as it does not understand why such a discrepancy should be allowed to exist between, on the one hand, the corporate parent’s having to fully recognize these items when determining the consolidated capital adequacy rate, and, on the other, the parent’s not being allowed to include in its core capital that involving the stakes held by minority interests in subsidiaries. This rule would constitute putting an end to a procedure which has proven amply proven its value.

fpmi has come out strongly for the levying of supplements on the backing to underpin claims due from banks whose balance sum exceeds $25 billion, and from non-regulated financial corporations. This proposal would lead to a better coverage of delinquency risks. To avoid creating disincentives, the supplement on capital backing should be introduced, simultaneously, in both IRB and standard versions.

fpmi has criticized the introduction of a leverage ratio. The greatest possible impact of this instrument could be as a “wakeup call” to bank supervision authorities. As the USA’s track record shows, it is not capable of serving as the “firm limit” foreseen for the initial thrust of Basel II (quantitative minimum requirements). The divergences existing among international standards of accounting would cause the institution of a leverage ratio to give rise to distortions of competition.
]]> http://www.fpmi.de/en/press/press-release/article/items/fpmi-supports-stiffening-of-capital-backing-regulations.html Thu, 01 Apr 2010 10:00:00 +0200 http://www.fpmi.de/en/press/press-release/article/items/fpmi-supports-stiffening-of-capital-backing-regulations.html The Munich Financial Center Initiative (known by its German abbreviation of ‘fpmi’) regards legislation standardizing product information sheets as being counterproductive. Instead of achieving its objective of improving consumer protection, it would in fact weaken it.

On January 1, 2010, the documentation of consultations involving financial investments became mandatory. This move has been accompanied by an ever-greater number of banks providing their customers with product information sheets prior to their entering into a contractual relationship with them. These sheets are designed to be quick and easy-to-understand briefings offering investors all the information needed to appreciate product features and risks. The forms and contents of such sheets depend on and depict the natures and thrusts of such products. These sheets enable providers of securities-related services to meet their legal obligation to dispense in an honest and clear way information on their products. Their meeting of this obligation is attested to by auditors not affiliated with them.

Legislators are currently considering passing regulations which would standardize such product information sheets. FPMI views these proposals as being counterproductive. The legislators’ insistence upon a schematization of contents and of depiction would not take into account the differences existing among these products, and would thus reduce the clarity and comprehensibility of the sheets. The standardization would also give rise to the misleading impression of these products’ having comparable functions and of their bearing similar levels of risk. “Consumer protection would not be in any way strengthened by such regulations,” comments Dr. Christine Bortenlänger, fpmi’s speaker. “Quite the opposite. We at fpmi view such regulations as having the potential to weaken it.“

Instead of such regulations, fpmi is calling for the financial services industry’s undertaking under its own initiative an audit of its product information sheets. This audit would identify how these sheets’ transparency and clarity can be improved, and how they could be standardized for categories of products.

The Initiative notes that the enacting of national-level legislation is, in any case, unnecessary, as the EU is about to introduce Key Investor Documents (KID). As their names suggest, the documents will provide investors, in standardized forms, with key information.

An exception to the above is constituted by the products offered on so-called “gray markets”. These are largely unregulated. FPMI supports these products’ being thoroughly audited by supervisory authorities. The Initiative is also coming out for legislation governing the contents of materials offering such products for sale. These moves would increase such products’ transparency and would thus be an effective way of better protecting consumers.]]> http://www.fpmi.de/en/press/press-release/article/items/fpmi-rejects-standardization-product-sheet.html Tue, 09 Mar 2010 10:00:00 +0100 http://www.fpmi.de/en/press/press-release/article/items/fpmi-rejects-standardization-product-sheet.html Economic upswings produce a strong demand for corporate financing. fpmi (Munich Financial Center Initiative) foresees the meeting of this demand requiring the undertaking of further supportive measures by Germany’s federal government. A failure to do such would primarily and negatively affect SMEs (small and medium-sized enterprises). The measures launched last year by the government served to lessen the impact of the financial crisis upon flows of corporate financing. fpmi is calling for their being set forth and expanded this year. The Initiative’s proposals: extend the term of Germany’s Economic Funds (Wirtschaftsfonds Deutschland) while simplifying its operating structures, and while taking steps to revive the securitization markets.

fpmi has identified several causes of the peril of a credit crunch. Prime among them: the lowering of corporate credit ratings resulting from declines in profitability registered in 2009. Other causes are the stiffening of the capital requirements placed upon banks supplying loans to their customers and the often accompanying decline in such backing ensuing from the financial crisis.

To deal with these problems, fpmi has drawn up a wide-ranging package of proposals. These include extending the term of Germany’s Economic Funds to 2011. To establish the preconditions requisite to achieve this, the German government should immediately initiate negotiations with the EU. Another proposal foresees the improving and simplifying of the conditions governing the dispensing of funds administered by the Kreditanstalt für Wiederaufbau (KfW—Germany’s public sector development bank). The Economic Funds are to furnish €40 billion of credit. Of that, more than €16 billion has been applied for, and only €5.7 billion approved.

An augmentation of the support ensuing from the funds would result from a simplification of the requirements placed by KfW on the applications for loans submitted by banks, and from a more expeditious processing of these applications. A way for KfW to enhance the attractiveness of the general-purpose loans provided by it and channeled via applicants’ main banks would be for it to assume part of the accompanying risk. This, in turn, would increase the capital backing and thus the amount of credit capable of being supplied by these banks. fpmi is also proposing KfW’s applying of less stricter standards when assessing the likelihood of a loan’s becoming delinquent. Doing such, in turn, would provide basically viable companies, which are thus those with good prospects, with access to this special-purpose program.

Reviving the securitization markets

In fpmi’s opinion, a third way to avoid a credit crunch is get securitization markets back on their feet. Prior to the crisis, these markets had been an importance source of the liquidity and refinancing availed upon and required by banks and by investors managing portfolios. Since the outbreak of the financial crisis and the accompanying loss of confidence in them, these instrumentalities haven’t been available. fpmi views the bringing about of a revival of securitization markets as being highly important, as doing such would provide a measure of relief from capital adequacy ratios. That, in turn, would increase the amount of credit capable of being supplied by the banks. Another positive ramification would be the broadening of this provision to once more encompass large-sized companies.

Incontrovertible is the fact that this revival has to be accompanied by the instituting of measures assuring a high quality of product. This constitutes the only way of restoring confidence in securitization markets. A prime thrust of these measures is increasing the products’ transparency. To achieve this, fpmi is calling for an improvement of the legal parameters governing securitization. One idea to be looked at it would be KfW’s purchasing or guaranteeing on a limited-term basis a portion of the securitized risks involving SMEs (with a remainder of such risks resting with the original provider of the loan). Doing such would quickly get the market back on its feet.

Mezzanine financing used to constitute an alternative to loan-backed instruments. This is scarcely the case nowadays. A large number of mezzanine tranches will expire in 2011 and beyond. A solution has to be found to the problem of follow-up financing. KfW has offered to replace expiring mezzanines with loans available from current special programs. fpmi doesn’t view this approach as being the right one, as it ignores the fact that a company’s creditworthiness is dependent upon its having equity which is capable of being comprised in such dedicated calculations.

Extend depreciations carried in balance sheets

fpmi has identified another promising way to preclude SMEs’ which undertook large-scale investments during the past few years from suffering a lack of credit: to extend the term of depreciations carried in balance sheets. Doing such would improve the key balance sheet indicators of what are generally very viable companies. That, in turn, would help augment the inflow of credit to the companies. To be effective, such measures have to, however, include those precluding negative ramifications upon balance sheets drawn up for tax purposes.]]> http://www.fpmi.de/en/press/press-release/article/items/fpmi-calls-upon-the-German-government-to-undertake-further-measures-to-combat-the-credit-crunch.html Wed, 03 Mar 2010 12:12:00 +0100 http://www.fpmi.de/en/press/press-release/article/items/fpmi-calls-upon-the-German-government-to-undertake-further-measures-to-combat-the-credit-crunch.html The first “fpmi inside – Munich’s Financial Forum” was staged on November 19th. This series of events is being staged to enable high-potentials working for fpmi member companies to get to know each other. The first get-together was attended by 120 of these high-flyers. After listening to a speech given by Klaus Greger, member of director in charge of an operating division of HypoVereinsbank, they discussed Greger’s key points and other topics of financial industry. One of its objectives is fostering the networking of the players comprising Munich’s financial community. To achieve this goal, fpmi has launched “fpmi inside – Munich’s Financial Forum”. To be held three to four times a year, these events will provide a forum in which young executives and professionals staffing fpmi member companies and institutes will get acquainted with each other and – through open and frank discussions – each other’s views.

The message emerging from the first “fpmi inside”, which was held on November 19, 2009” – this series is going to be a success.

Held on the premises of the Munich Stock Exchange, which are located in the city’s Karolinenplatz square, the first event was attended by some 120 participants. These, in turn, were handpicked by the executive board members and managing directors of fpmi member companies. The get-together was kicked off by words of welcome given by Christine Bortenlänger, fpmi’s speaker and member of the Munich Stock Exchange’s management. Next up was Klaus Greger, who is the director in charge of HypoVereinsbank’s division for corporate clients in Germany.

His inaugural talk was entitled “Economic prospects for 2010 – joining together to overcome the crisis”. It started by providing a summary of the unfolding of the crisis gripping the world’s financial and other markets. It then reviewed the divergent trends now shaping the markets. Greger warned participants against viewing the recovery of financial markets as being completed. He sees this viewpoint as being premature and overly optimistic. The IMF did recently reduce its estimate of total losses and writedowns. These still, however, amount to €3.4 trillion. Of that, only €1.6 trillion has been written down. “We still have a long row to hoe,” stated Greger, who went on to point out that the strong results turned in by a number of banks stemmed from extraordinary and highly positives circumstances. These include the markets’ volatility, the large number of new issues of treasury and corporate bonds, and the plentiful and cheap liquidity.

The profits being reaped by the banks have given rise to the widespread and publicly voiced criticism that the banking industry hasn’t learned the lessons of the crisis. Greger sharply rejected such criticism. The industry has, in fact, recognized that markets are not always capable of properly regulating themselves. This insight, in turn, forms the basis for the institution of changes. One result of this insight has been the achieving of the consensus that the world’s financial markets have to observe a single set of rules. In Greger’s opinion, the measures recently undertaken will enable the attaining of this goal.

Greger went on to make the point that these measures have both unleashed a process of rethinking in the financial world and have expedited underlying trends. Greger cited two of the latter as being of key importance to the development of the economy in the years to come:

The first is the new role of the government in the economy. The measures instituted by the world’s governments have imparted a greater prestige and a large role to them in the managing of their economies. This role has been widely accepted by the business community. Greger did, however, come out against the governments’ being accorded too great a say. “We’ve got to create markets which are both free to operate and subject to the (beneficial) interventions by governmental bodies,“ summarized Greger.

Greger entitled the second trend “the comeback of equity”. The increasing of the requirements for banks to maintain equity makes basic sense, maintains Greger. These changes will, however, also have negative ramifications, such as the sustained impairing of banks’ abilities to provide credit. To offset this trend, the market for securitization has to be jumpstarted back into life.

The get-together’s ensuing discussion centered on this point. Raised in the discussed was the question of the relationship between the growing need for equity and a larger number of IPOs by SMEs (small and medium-sized enterprises). Greger foresees such a scenario. He does not, however, view it as materializing within the next twelve months. Gregor responded to a question about the timing of the recovery of the securitization market with a remark on the need for the impetus provided by state participation.

The lecture and discussion were followed by the guests’ exchanging of views and business cards. This networking was set forth in the subsequent reception, which went on for far longer than the scheduled conclusion of 8.30 p.m. Ms. Bortenlänger, the get-together’s hostess, had this to say about the first fpmi-inside: “The large number of participants and the many good discussions carried on this evening show that this series of get-togethers is going to be a must-attend event for the high potentials in Munich’s financial community. This, in turn, will enable fpmi inside to achieve one of the initiative’s goals: getting its people talking and working together.”]]> http://www.fpmi.de/en/press/press-release/article/items/successful-launch-by-munich-financial-center-initiative-of-fpmi-inside-munichs-financial-forum.html Wed, 02 Dec 2009 10:00:00 +0100 http://www.fpmi.de/en/press/press-release/article/items/successful-launch-by-munich-financial-center-initiative-of-fpmi-inside-munichs-financial-forum.html This school year is only two months old. The companies and institutes forming Bavaria’s financial industry have, however, nearly completed their professional training plans for 2010. Young persons graduating from secondary schools this year should, therefore, immediately submit their applications to the state’s banks, insurers and other industry members.

The companies and associations forming fpmi (Munich Financial Center Initiative) will have available in 2010 more than 3200 trainee positions. That’s more than in 2009. Of this year’s total, 1400 will stem from Bavaria’s savings banks. The second largest group – 820 – will be made available by the state’s credit unions. HypoVereinsbank will have 450 trainee positions; Allianz, 150; Versicherungskammer Bayern, 120; and HUK-Coburg some 100. Another major source of trainee positions is the Nürnberger Versicherungsgruppe.

“The large number of trainee positions shows that fpmi’s members are not letting the financial crisis deter them from maintaining their commitments to being good corporate citizens,” comments Christine Bortenlänger, managing director of the Munich Stock Exchange and Speaker of fpmi.

An overview and comprehensive listings of these trainee positions are to be seen in the englisch job portal maintained on fpmi’s Website.
]]> http://www.fpmi.de/en/press/press-release/article/items/apply-now-for-one-of-the-more-than-3200-trainee-positions-in-bavaria-from-fpmi-members-starting-in-2010.html Tue, 17 Nov 2009 10:00:00 +0100 http://www.fpmi.de/en/press/press-release/article/items/apply-now-for-one-of-the-more-than-3200-trainee-positions-in-bavaria-from-fpmi-members-starting-in-2010.html Which regulations are capable of preventing crises on financial markets was the main topic of the Third Bavarian Financial Summit. The daylong event was staged by the Bavarian Finance Center (BFC) and was attended by more than 300 of the state financial industry’s leaders.

The introductory remarks made by Martin Zeil, Bavaria’s economics minister, served as a keynote for a number of the Summit’s other speakers: “We need stricter regulations. This strictness has to be informed, however, by the sense of the objectives we are striving to attain and has to be commensurate to them,” he demanded. Zeil came out against an undifferentiated beefing up of supervisory regulations. Another point made by the minister: the time is now at hand to quickly implement the resolutions made on the international level as to the better regulation of financial markets. As Zeil noted: “This window of opportunity is finite.”

The minister hailed the plans made by Germany’s new government to transfer the responsibility for bank supervision from BaFin (Germany’s Financial Markets Supervision Agency) to the Bundesbank. As he pointed out, by doing such, Germany’s government had adopted a proposal made by Zeil a year ago. This proposal had also been advanced by fpmi in a position paper published shortly after Germany’s federal election on September 27th of this year.

A number of participants in the Bavarian Financial Summit made the point that the know-how possessed by financial market supervisors and by other regulatory authorities has to be beefed up. “We need regulatory authorities whose work is better than it was in the past,” stressed Theodor Weimer, Speaker of the Executive Board of HypoVereinsbank. “Better work means better pay for them,” he added. A key thrust should be “preventing arbitrage between supervisory systems.” Weimer called upon the responsible body to create regulations of truly global reach and to “not get stuck in local nitpicking”.

Weimar took a highly critical look at the recent developments on the world’s financial markets. The main problem is an excess of liquidity. This has enabled the banks to reap large-sized profits. This liquidity has, however, led to the decoupling of the financial sector from the real world economy. The failure to take counter-measures “would give rise to the peril of a slow and very steady rise of a new bubble.”

“No centralized mega-supervisory authority”
Michael Kemmer, the Chairman of the Executive Board of BayernLB, came out in favor of a regional-based approach to bank supervision. Such supervisory authorities have to be made capable of working together on the transnational basis. This should be accompanied by a refraining from having national banking systems being controlled by gigantic centralized authorities responsible for supervising the entire EU or world, stated Kemmer. Lawmakers should also not indulge in quick fixes. Rather, they should come up with a carefully crafted schedule of promulgation of regulations. “The world economy is deep in the doldrums. I believe this is therefore not the time to undertake a far-reaching stiffening of regulations. Such beefings-up require in any case periods of transition,” noted Kemmer.  These should be preceded by the systematic carrying out of fundamental cost-benefit analyses on how such adjustments would affect the financial industry and the economy as a whole.

In further remarks, Kemmer stressed that the pending restructuring of the bank supervisory system could well give rise to an absence of control. “This time of difficulties mandates having a system of bank supervision which is capable of taking requisite measures at any time. This system can not restrict its efforts to repairing itself.”  The chairman of the executive board of Bayern LB also called upon banks to do their share. “Producing a financial industry which is capable of functioning on a sustainably solvent and profitable basis is not solely the responsibility of the system supervising it. In fact, the main responsibility rests with us, the players on the market,” he pointed out.

No transfer of responsibility for the supervision of the insurance industry to the Bundesbank
Rolf-Peter Hoenen, the president of Germany’s Association of the Insurance Industry (GDV) joined in calling for a boosting of the quality of supervision. Hoenen doesn’t see any reason to transfer the responsibility for the supervision of the insurance industry to the Bundesbank, as is now being discussed. “This transfer would give rise to the peril of the “responsibility for the supervision of the insurance industry becoming an appurtenance of the banking supervision system “, stated Hoenen. As he noted, insurers pursue business models which differ from those of banks in that the former are designed to achieve results sustainable over the long term. This difference means that the supervision of insurers cannot be accomplished through the employment of the rules applied to banks, Hoenen stressed.

Rules for central banks and for politicians drawing up budgets
Wolfgang Gerke, one of the BFC’s presidents and thus one of the Bavarian Financial Summit’s organizers, cast a critical eye on both the private financial industry and on the public sector, and, specifically in the latter on central banks and on the politicians drawing up budgets. These were the real causers of the financial crisis, maintained Gerke, who went on to make the accompanying criticism that the countries participating in Pittsburgh’s G-20-summit failed to set policies shaping their fiscal and monetary policies.


Further Information

> Video Statements on the third Bavarian Financial Summit
]]> http://www.fpmi.de/en/press/press-release/article/items/bavarian-financial-summit-demands-higher-quality-of-regulation.html Fri, 06 Nov 2009 10:00:00 +0100 http://www.fpmi.de/en/press/press-release/article/items/bavarian-financial-summit-demands-higher-quality-of-regulation.html