ECB: German Banks Are Undercapitalized

Juergen Stark, chief economist of the European Central Bank, said at a meeting with the head of Unions Parliamentary Group in Berlin, that German banks are undercapitalized.

"He was referring largely to savings banks and regional banks (Sparkassen und Landesbanken). Accordingly, called for privatization of the German savings banks, based on the successful Spanish model. The ECB declined to comment.

Jürgen Stark’s comments feed doubts about the local banking system.This is even more surprising given the positive results for the regional banks in the stress test of the EU in July, in which the ECNB were heavily involved".

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