German watchdog says worst of coronavirus crisis is yet to come

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FILE PHOTO: The Deutsche Bank logo is pictured on a company’s office in London, Britain July 8, 2019. REUTERS / Simon Dawson

FRANKFURT (Reuters) – The German financial regulator expects the worst of the coronavirus crisis to be yet to come, although there has been no immediate threat to financial stability from the pandemic.

But as many countries in Europe and beyond see rising rates of coronavirus infection and governments wonder how to respond, BaFin chairman Felix Hufeld has expressed concern about the 20% or the weakest 30% of the institutions it oversees.

“We won’t get out of this thing painlessly. This is certain. The hardest part is yet to come, ”Hufeld said on Wednesday at a banking conference in which he and other panelists were separated on stage by plastic screens.

Auparavant, Deutsche Bank (DBKGn.DE) Managing Director Christian Sewing predicted that the economy will not return to normal this year or next, and that many sectors will operate at 70% -90% of capacity, with “serious consequences”.

“A lot of companies will have to adapt to this and be successful in being profitable with lower revenues in the long run,” Sewing said.

Reporting by Patricia Uhlig, Hans Seidenstuecker and Tom Sims; Edited by Thomas Seythal and Alexander Smith

Our standards:Thomson Reuters Trust Principles.

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