By Dinesh Nair and Mirna Sleiman
DUBAI Nov 21 Deutsche Bank, Germany's largest
bank, expects the euro zone to remain intact and its slow pace
of recovery to create opportunities for outside investors, its
co-chief executive said on Wednesday.
Deutsche Bank AG's Anshu Jain told business
leaders in Dubai that the chances of a country leaving the
single currency bloc had diminished.
Fears of a so-called peripheral euro zone state such as
Greece leaving the currency union have haunted both markets and
politicians as the region's debt crisis has unfolded.
"Fundamentally, we believe the euro zone will remain
intact," Jain said, saying "the market-implied volatility of a
peripheral country defaulting or leaving the euro zone has
Attempts to get Greece's debt down to a sustainable level
have so far stumbled, with the country's international lenders
failing to agree a deal overnight for the second week running.
Jain used his visit to the Gulf region to highlight the
opportunities for its sovereign wealth funds to invest in Europe
at a time when many of the European Union's economies are
struggling to kick-start their economies.
European leaders have flocked to the Gulf states, which have
built up large reserves as a result of their oil revenues, to
try to drum up investment interest in their economies.
"I think the euro zone will be stable, unexciting but stable
and something for outside investors to look to as there is still
value," Jain, who is in the Gulf for a week, said.
He also predicted that the world's banking industry would
shrink dramatically as a result of the regulations that have
followed the financial crisis, warning that regulation could hit
the supply of credit to the economy.
"By the time we are finished with the unintended
consequences of regulation, my feeling is we will have five to
six (global) banks remaining," Jain said.
He predicted his own bank would be one of those left
"Whilst regulation is understandable and desirable,
over-regulation would carry the risk of unintended consequences
- for example, potentially lessening the supply of credit."