Ermotti said CNBC's "Squawk on the Street" on Thursday that he "would not look at one idiosyncratic position as being a good proxy for the unified banking industry" in Europe, noting that the sector is absolutely quite sound & has made huge progress over the last 7 or 8 years in terms of addressing banks' capital positions & improving their business models. He was speaking on the sidelines of the World Bank/International Monetary Fund meeting in Washington.
The CEO accepted that the sector has been subject to little suffering, but mostly because of macroeconomic conditions in Europe like an long term lack of growth & over-capacitated industries.
If only the banking zone takes a hit, the problem is solvable, Ermotti contended, so long as posible collateral damage is kept attentive. He cited possible negative effects of a situation like Deutsche Bank's, which led to worldwide job cuts at the lender just. Ermotti said the impact could result in falling consumer confidence & potential stock market bubbles.
It's time, Ermotti insisted, to find a resolution & "create a better structure" to address problems like Deutsche Bank's. Telling about the problem without finding an useful solution will only create more uncertainty, he told. "Central banks, on their own, can't address the structural problems we are facing, particularly in Europe," Ermotti said. "Central banks can only help upheaval it from one place to the other. It is not the only medicine available to address the issues we have," he told
A more regarding issue than Deutsche Bank is the presence of low & negative rates in Europe, the CEO told. "I am more concerned about the savings & social system being put under pressure" by declining rates, he said clearly
