Wednesday, October 5, 2011

German Banks Feel Strains

Wall Street Journal
October 5, 2011

Investors are increasingly scrutinizing the euro-zone assets held by German banks for fear the lenders might face big-write downs on their exposure to struggling Southern European countries such as Greece.

German banks have so far avoided the worst of the recent strains in capital markets, and still have solid access to funding. But analysts say German banks such as Deutsche Bank AG, Commerzbank AG and the public-sector Landesbanks won't be able to avoid the turmoil spreading through the sector.

"German banks have been less affected by funding concerns, but investors are still concerned about asset quality," said Jon Peace, a banking analyst at Nomura in London.

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