Chancellor Angela Merkel has broken a lance for the savings banks. At the same time, however, it makes clear demands on the German banking landscape.

Chancellor Angela Merkel at the 26th German Savings Bank Conference.

Bund-Chancellor Angela Merkel (CDU) has asked the savings banks not to close too many branches. “Stay balanced with the area. Efficiency is not everything, the Sparkasse always has to be the soul of the place and its region, ”said Merkel in front of 2,500 board members and local councils. In her speech at the “Sparkasse Day” in Hamburg, the Chancellor promised this audience in return that she would work in European banking legislation to make things easier for small financial institutions. Because savings banks are an important pillar, especially in rural regions, in order to preserve the equality of living conditions and the supply of financial services there.

Merkel referred to the successes in enforcing “proportionality” in European banking regulation. For example, banks with total assets of less than 5 billion euros have recently had slightly fewer documentation requirements. But at the moment dozens of Volks- and Raiffeisenbanken and also savings banks are joining forces because they overwhelmed the bureaucracy. Merkel promised to “keep listening to the savings banks”. But enforcing “proportionality” in the EU is no easy business. Because other countries hardly have any small banks. Germany should, however, afford this diversity because it makes the country more stable, said Merkel and expressly supported the 3-pillar model of public savings banks, cooperative banks and private banks.

Each of these three pillars must be self-sufficient and competitive in itself. But then she named an exception: Merkel called on the savings banks to find common solutions in payment transactions with the other banking pillars in order to counter digital competitors, which could be Google Pay and Apple Pay. Merkel conveyed her core message with the words “You must not shut yourself off and not close too many branches”.

The Chancellor also tried to get the savings banks on board in the fight against climate change, where she experienced a “justified impatience among young people”. More sustainable financing could also make the financial system more stable. The German financial center will benefit from Great Britain’s exit from the EU. “But these small gains do not make up for the loss,” said Merkel. At the moment one is at a “sensitive moment for future relationships”. It is important to her that Great Britain withdraws in a self-determined manner and does not feel pressured. Merkel admitted that the EU is not fast and innovative enough. But on issues of climate protection, security and protectionism that is becoming more socially acceptable again, the EU countries would have to come together if they wanted to be heard by the United States and China.