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MrWhy.com » Videos » Studio Guest: Jörg Rocholl, ESMT Financial Markets Expert |
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Studio Guest: Jörg Rocholl, ESMT Financial Markets Expert
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Studio Guest: Jörg Rocholl, ESMT Financial Markets Expert
MADE IN GERMANY talks with Jörg Rocholl from the European School of Management and Technology about the problems with banking giants and the discussion about bonus donations.DW-TV: Axel Weber, the President of the German Bundesbank, presented a quite interesting and concrete idea by saying that banks basically have to put money to one side for a rainy day, so to speak. Do you think that’s a good idea, could that work? Jörg Rocholl: Yah, definitely. It is a very good idea. We've seen that the money they put aside has decreased over time dramatically and I think it's a good idea to do exactly the opposite: to increase the money put aside — in particular for larger banks which might be systemically more relevant than smaller banks.   DW-TV: Because you just mentioned these "system-relevant" banks, why should they follow his advice? We just heard in the report that it's highly unlikely that any government would allow them to go bankrupt. Jörg Rocholl: Right, so the key part here is the common synonym of 'too big to fail'. These banks are so large that they know that the government will just bail them out should something go wrong. But if the pressure increases on them -- in particular the tax payers pressure them to not cover the losses again -- then there will be a chance to do exactly this: to increase equity requirements for exactly those banks. DW-TV: And will the pressure increase? I mean, the G20 Summit will be underway pretty soon. What outcome should you expect from there? Jörg Rocholl: I think the pressure is pretty intense -- not only in Europe and not only in Germany, but also on the other side of the pond. So we saw Obama's top economic advisor Larry Summers saying exactly the same in that sense with respect to the equity ratios as the Bundesbank president." DW-TV: What prompted the idea of bonus payments in the first place? Jörg Rocholl: In the first place it is about incentives. So basically to give incentives to employees to w...
Video Length: 479
Date Found: December 09, 2009
Date Produced:
View Count: 0
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