New Bundesbank representative in Brazil
Eike Berner has been named as the Bundesbank's new representative in São Paulo. On 1 December 2016, he will take over from Marc Rennert, who has held this position since December 2012. Speaking at a ceremony to mark the occasion in São Paulo, Bundesbank Executive Board Member Andreas Dombret thanked Marc Rennert for his hard work over the past four years. The event was attended by Reinaldo Le Grazie, Executive Board Member of the Central Bank of Brazil, and German Consul General Axel Zeidler.
Dombret particularly emphasised Rennert's involvement in preparing the memorandum of understanding between the Banco Central do Brasil and the Bundesbank, which representatives of the two institutions signed in 2015. This formalised closer cooperation between the two central banks with respect to knowledge transfer and education and training opportunities for staff members.
Dombret pointed to the close economic ties between Brazil and the euro area.
"Exchanging expertise and nurturing fruitful personal networks with central banks, financial authorities, supervisory authorities, banks and others is more important than ever," he said. The objective of the Bundesbank's network of international representatives was to observe economic developments from within the countries in question and to liaise with other central banks in the region.
European banks face challenges
In his speech, Dombret also addressed the current situation in the European banking sector.
Banks were experiencing a wholly different business environment to that of a few years ago, he said, characterised by persistent low interest rates and the digital transformation of the banking sector.
"Traditional money-making strategies in banking are [being] called into question," Dombret said. In this context, he pointed out that earnings from interest-bearing assets still accounted for the lion's share of banks' profits. Credit institutions needed to adapt to the changed environment and could not shift the responsibility on to others. The banking sector's transformation was already under way.
"Banks will have to lower their high costs and adapt to the digital age in the years to come," Dombret explained. Banks would also have to build up more capital and thus improve risk-bearing capacity.