Germany

No wonder Germany is on the warpath against a proposed global standard for how banks calculate the capital they need: Its largest lenders rank among the worst when it comes to how they assess risk. That means Deutsche Bank AG and Commerzbank AG will be affected more than most big lenders and may have to raise additional capital, if and when the Basel Committee on Banking Supervision implements a proposed floor for how much their risk-weighting of assets can veer from standardized measures.

Deutsche Bank AG employees may have manipulated internal indexes as part of an allegedly fraudulent scheme to help Banca Monte dei Paschi di Siena SpA conceal losses, according to an audit commissioned by German regulators. The study, requested by watchdog Bafin and seen by Bloomberg, says an internal Deutsche Bank review described “abnormalities” in the values of proprietary indexes used to set the price for the Monte Paschi deal in December 2008.

The German pilots union VC has announced further strikes at Lufthansa for Tuesday and Wednesday after fresh talks at the end of a four-day walkout failed to settle their long-running pay dispute, the International New York Times reported on a Reuters story. "Unfortunately the high-level talks that took place today at short notice failed to produce a result," VC board member Joerg Handwerg said in a statement on Sunday.

German economic growth slowed more than expected in the third quarter of 2016 as weaker exports put the brakes on overall activity in Europe’s largest economy, preliminary data showed on Tuesday. The German economy grew by 0.2 per cent on the quarter between July and September after it expanded by 0.4 per cent in the three months to June, the Federal Statistics Office said. That was lower than the consensus forecast in a Reuters poll for 0.3 per cent growth.

Deutsche Bank AG Chief Executive Officer John Cryan’s troubles range from the company’s mounting legal costs to stricter regulation that’s eroding returns. And there’s at least one challenge he shares with his German rivals: Europe’s most competitive market. “Deutsche Bank still has a lot to deal with, but the German market as a whole is pretty rotten,” said Martin Wilhelm, founder of IfK GmbH, which manages more than 600 million euros ($650 million) of fixed-income securities in Kiel, Germany.

Germany’s pension insolvency vehicle, the Pensions-Sicherungs-Verein (PSVaG), has for the first time since its inception in 1975 set the contribution rate for companies to 0 per thousand. Because so few insolvencies were reported this year, the PSVaG will not have to take on pension liabilities from companies in financial trouble. The PSVaG also waived its right to set advance payments for 2017 but added that it would review this decision early next year.

German chemicals manufacturer BASF has been accused of avoiding close to €1 billion of tax. In a report published on Monday, the company is alleged to have used aggressive tax-planning strategies in the Netherlands, Belgium, Switzerland and Malta to reduce its tax burden, the Irish Times reported.

Commerzbank AG on Friday said it swung to a net loss in the third quarter after booking hefty provisions for an extensive overhaul, but still expects to make a profit over the full year. Germany’s second-largest lender by market capitalization reported a €288 million ($319.5 million) net loss in the three months to the end of September, compared with a €230 million profit in the same quarter last year. The figure was better than the €551 million loss forecast by analysts in a poll by The Wall Street Journal.

German prosecutors have widened an inquiry into suspected market manipulation by managers at Volkswagen to include the carmaker's supervisory board Chairman Hans Dieter Poetsch, VW said on Sunday. The investigation, which relates to Poetsch's time as finance chief, is the latest fallout from VW's admission last year that it cheated on diesel emissions tests. VW has acknowledged it installed software that deactivated pollution controls on more than 11 million diesel vehicles sold worldwide, damaging its global business and prompting the departure of Chief Executive Martin Winterkorn.

Volkswagen AG’s efforts to cut costs amid mounting burdens of its emissions-cheating scandal face a new roadblock, as core shareholders and labor representatives meet for an extraordinary shareholders meeting on Friday to try to break an impasse over restructuring, The Wall Street Journal reported. Chief Executive Matthias Müller, who took command a year ago following reports that the car maker had installed illegal emissions software in some models, is trying to realign the company’s businesses.