The US Representative office of the German Central Bank provided us with a speech by Dr Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank: “Business models and the banking sector seen in terms
of financial stability”
The presentation was delivered at the 16th Banking Symposium of the European Center for Financial Services “Profile and profitability – Are banks’ business models in transition?”
Note: In his speech, Mr. Dombret outlines how banks’ business models shifted away from traditional commercial banking to more volatile forms of revenue generation. However, divorcing investment and commercial banking is not the answer to preventing further crises. Instead, the benefits of universal banking can be preserved if the too-big-to-fail problem is addressed by cross-border, harmonised resolution regimes. Finally, requiring banks to hold adequate capital is the key to preserving financial stability in the future.