No sense in G20 limiting bank size-German FinMin

September 4, 2009

German Finance Minister Peer Steinbrueck of the Social Democrats (SPD) (top) looks to Economy Minister Karl-Theodor zu Guttenberg of the Christian Democratic Union (CSU) at the weekly cabinet meeting in Berlin, September 2, 2009.   REUTERS/Fabrizio Bensch (GERMANY POLITICS IMAGES OF THE DAY)    BERLIN, Sept 4 (Reuters) – Germany opposes any plans by the Group of Twenty to limit the size of banks to avoid individual institutions wielding too much influence in future and posing a risk, Germany’s Finance Minister told a newspaper on Friday.
   “I do not think it is sensible to set an upper limit for banks. It is an illusion if we shrink all banks to the size of, let’s say, Iserlohn savings bank,” Peer Steinbrueck told the Berliner Zeitung in an interview.
   Iserlohn is a town in the state of North Rhine-Westphalia.
   Steinbrueck said big international financial institutions would be needed in future.
   “In addition, the crisis has led to a process of downsizing at the banks. But we need to better equip institutes with capital and liquidity as well as with more effective controls on cross-border business. We have made some progress on this,” he said.
   Steinbrueck also warned against being too optimistic about the economic situation, saying there could yet be a rise in insolvencies and unemployment.
   “It is right that there is a glimmer of hope. We can’t rule out that the last quarters of this year will turn out better than expected. And we might be able to slightly raise our economic forecasts for 2010,” said Steinbrueck.
   German gross domestic product in Europe’s biggest economy grew by 0.3 percent in the second quarter.
   (Reporting by Madeline Chambers; Editing by Andy Bruce)
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Friday, 04 September 2009 09:20:47RTRS [nL4381314 ] {C}ENDS

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