Germans should invest their savings in emerging-market funds to bolster their pensions rather than accept the low interest rates lenders offer on deposits, Juergen Fitschen, co-chief executive officer of Deutsche Bank AG, said.
“We have a sustainable overhang of deposits in Germany,” Fitschen said at a conference in Frankfurt today. “It isn’t good for young emerging markets to be investing their surpluses in mature markets. Capital should go the other direction.”
German deposits have swollen as consumers shy from investing amid the European sovereign debt crisis and as savers abroad transfer funds to the euro area’s perceived safe haven. The country’s economy risks becoming less competitive if a culture of risk-aversion sets in, said Fitschen, 64.
“We could say we have enough risks in our lives and put our money in accounts at savings and cooperative banks where we’d get no interest but could feel no one could take it away,” he said. “If society wants to take that approach, it will lose competitive dynamic.”
Fitschen also said that while all banks are “welcome” in Germany, “you have to wonder what banks that offer significantly higher interest rates than we do are doing with the money.”