German experts generally critical of merger between Deutsche Bank, Commerzbank:survey

BERLIN, March 21 (Xinhua) -- German financial market experts were generally critical of a merger between Commerzbank and Deutsche Bank, according to a survey conducted by the Centre for European Economic Research (ZEW) published on Thursday.

Following the recent confirmation that Deutsche Bank and Commerzbank have entered talks about a possible merger, the ZEW surveyed 174 German financial market experts on their views about the possible merger.

With 65 percent, a majority of the financial experts disagreed with the statement that a merger of the two private German banks would be "good" for the German financial system. In contrast, only 15 percent surveyed by the Mannheim-based research institute agreed with the statement.

Most experts believed that the merger of Deutsche Bank and Commerzbank would "not lead to any significant economies of scale" that would increase the competitiveness of a merged major bank. Almost 55 percent disagreed with the statement that the new bank would be more competitive internationally than the two individual banks.

"The disadvantages of a merger between Deutsche Bank and Commerzbank, which is complicated and expensive to implement, outweigh the advantages. An increase in systemic risk, on the other hand, is to be expected and should be considered when creating a new major bank," said ZEW president Achim Wambach.

Almost 80 percent of the survey participants feared that there could be an increase in systemic risk if the Deutsche Bank and Commerzbank went ahead with the merger.

The ZEW noted, however, that the experts were not rejecting the principle of consolidation among Germany's major private banks, as indicated by the fact that just over half of the experts agreed with the statement that the German economy needs a large German bank.