Germany’s Big Banking Merger Smacks of Despair
It just highlights how ill Europe's banking system is. It’s unclear how the deal will fix either firm's weaknesses.
Together at last?
Photographer: Krisztian Bocsi/BloombergBeware of the lipstick on this pig. The merger of two of Europe’s biggest lenders is a desperate government-orchestrated attempt to salvage what’s left from the wreckage caused by years of failed global ambitions, costly scandals, and policy failings at home.
On Sunday, Deutsche Bank AG confirmed it is in talks with German rival Commerzbank AG. That both lenders need help is obvious. A deal would bring together two of the region’s most inefficient banks. By eliminating the overlaps, a fitter national champion should emerge to help oil the wheels of Europe’s largest economy. The bloc relies heavily on its lenders to drive growth and, in the absence of the conditions for cross-border deals, this may be as good a deal as it gets.