Scholz answered journalists’ questions at the press conference at the end of the European Union (EU) Leaders’ Summit held in Brussels.
Scholz stated that EU leaders discussed the latest developments in global markets and the situation in European countries at their meeting today.
Stressing that the European banking system is stable, Scholz said that banks in the EU are subject to strict supervision and have strong capital resources.
Asked by a journalist whether the German federal government could offer a bailout to Deutsche Bank, Germany’s largest market share bank, in an emergency, Scholz said: “There’s no need to worry about anything.”
Scholz commented, “Deutsche Bank has completely restructured its business model by modernizing it and is a very profitable bank.”
Deutsche Bank shares fell sharply today as stress on the banking system continued to mount after the Fed’s latest rate hike. The price of the stock has approached the lowest level in the last 5 months.
Shares of other German bank Commerzbank also fell more than 5 percent today.
Deutsche Bank and Commerzbank shares have lost more than 25 percent since the bankruptcy of Silicon Valley Bank in the US and the start of the banking crisis about two weeks ago.
The developments in Swiss bank Credit Suisse and the bankruptcy of Silicon Valley Bank (SVB) and Signature Bank in the USA raised concerns about the health of the global banking sector, while these concerns have put European banks under pressure since March 17.
Since the emergency bailout of Credit Suisse by rival UBS, many investors have worried that the confidence crisis will spread to other financial institutions.
In Europe, the deal between banks UBS and Credit Suisse was put under pressure after the AT1 bond, a subordinated debt instrument with a face value of 16 billion francs ($17.3 billion), was written off. under was left.
The rescue of Credit Suisse caused volatility in European markets as bond prices of banks were under pressure.
CDS of other major financial institutions such as UBS, Societe Generale also rose today.