A recent study even comes to the conclusion that only 6% of German banks earned their cost of capital last year. What can explain these weak earnings? Well, the main culprit in Germany seems to be a business model that is relatively dependent on interest income. Such a business model poses a major challenge in the current environment of low interest rates.
Vítor Constâncio: Presentation of the European Central Bank Annual Report 2017 to the Committee on Economic and Monetary Affairs of the European Parliament Introductory remarks by Mr Vítor Constâncio, Vice-President of the European Central Bank, to the Committee on Economic and Monetary Affairs of the European Parliament, Brussels, 9 April 2018.