(Adds additional comments, background)
WASHINGTON Oct 7 German Finance Minister
Wolfgang Schaeuble on Friday warned that a new financial crisis
could not be ruled out and said he agreed with the International
Monetary Fund's assessment of banking system risks from
"ultra-loose" monetary policy.
Schaeuble, speaking at a news conference to discuss
Germany's leadership of the G20 major economy meetings in 2017,
declined to answer direct questions about the health of Deutsche
Bank, which is facing a crisis of confidence in the
wake of a U.S. demand for $14 billion in fines over its sales of
faulty mortgage-backed securities.
But he repeated his sharp criticism of "ultra-loose monetary
policy," which includes the negative interest rates and other
unconventional strategies of the European Central Bank aimed at
jolting Europe out of extremely weak growth.
"The danger of a new crisis has not completely vanished,"
At the IMF's semi-annual meetings in Washington, Fund
officials have said that Deutsche Bank needs to reassess its
business model to maintain profits and capital in what is
expected to be a long era of low rates that will pressure
Schaeuble said it was not the place of the IMF and other
international institutions to supervise European banks, but
added that more voices in the international community were now
expressing concern that the risks of ultra-loose monetary policy
may outweigh its chances of success.
"If the IMF itself is warning against the consequences of
ultra-loose monetary policy, I think it's a sign of hope that we
will take more seriously what the Bank for International
Settlements is saying again, again and again," Schaeuble said.
"That two things together - the global overhang of
indebtedness, private, public and company, together with an
ultra-loose monetary policy - maybe is one of the risks we will
have to tackle even since we have drawn all the lessons of the
financial crisis 10 years ago."
Schaeuble said the G20 finance ministers and central bank
governors at a meeting on Thursday night did not discuss
Britain's looming negotiations to leave the European Union,
saying that this was a matter between the UK government and the
(Reporting by David Lawder; Editing by Andrea Ricci)