CFS Financial Center Index: The Financial Industry Sentiment Dampens
Revenues in the second quarter declined sharply / Companies fear conflict of interest concerning banking supervision by the ECB / High probability is assumed for an exit from the eurozone
The CFS Financial Center Index fell at the beginning of the third quarter 2012 by 2.3 points to 108.8 points. Thus, the business climate in the German financial industry is back to its level from last January. At the beginning of the second quarter both the surveyed financial institutions and service providers expected a more optimistic future within the next three months. The decline in the index is largely attributable to lower sales and earnings of financial institutions during the second quarter, as well as a revision of their profit expectations. The financial service providers’ outlook for the third quarter has also deteriorated. Unlike the results of the financial institutions, their earnings improved in the second quarter.
In a special survey about the banking union, more than half of the 400 companies surveyed expressed their disapproval with the establishment of a European banking supervision located at the European Central Bank (ECB). A third of the respondents estimated the likelihood that the European Monetary Union will experience an exit of a member state within the next 2 to 3 years to be higher than 80%.