Banking and Finance
In year one under the ECB’s supervisory regime, everything changed in the financial sector – and also nothing at all. The unfamiliar cooperation with the new supervisors, and a growing focus on Frankfurt as a banking location, added a new dimension to the regulatory field. And for the major banks concerned, the new supervisory mechanism meant greater expense, including higher administrative costs. L-Bank even fought back against the ECB’s jurisdiction in a lawsuit before the European General Court (EGC). But, overall, the new Single Supervisory Mechanism (SSM) is not so much an upheaval as a continuation of developments of recent years: greater regulation, thus also more restructuring activity and sales of business divisions, and higher demand for advice.
New players flood the market
Meanwhile, the debt finance market flourished, and more and more banks appeared in the market as lenders. As well as these, private equity houses, insurers and pension funds were often given a look in with their own credit funds. But the mix of high pressure on investors to invest and the high proportion of debt capital also sparked fears that the next credit crisis could be around the corner. The ECB’s Asset-Backed Securities Purchase Programme (ABSPP) also caused skepticism. One lawyer commented: “The ECB is essentially creating an artificial ABS market to rescue the banks.”
IPO climate remains shaky
On the IPO front, things were looking really good to begin with. But mid-2015 saw a number of IPOs put on ice because of the worsening Greek crisis, turbulence in the Chinese stock market and the pending interest rate decision by the US Federal Reserve. But the pipeline remained nice and full. A number of sizeable secondary offerings also caused a stir.
Fintech – new buzzword attracting attention
The most recent market trend has already established itself in the Anglo-Saxon realm and Scandinavia, but is now rapidly gaining significance in Germany: fintech companies are using IT technologies to offer financial services in e-commerce, mobile payment, crowd-lending or crowd-investing – potentially posing a fundamental threat to the private client businesses of the established banks.
JUVE Law Firm of the year