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Report: German bank association head mulls creation of European mega-bank

The creation of a powerful universal bank in Europe is a "meaningful idea," but a prerequisite for any cross-border bank merger would be that Germany, France and other countries agree to it, Hans Walter Peters, president of the Association of German Banks and managing partner of Joh. Berenberg Gossler & Co. KG, said in a Handelsblatt interview published June 6.

A large European institution would be able to compete with U.S. rivals, he reportedly said, but added that from a regulatory point of view, a large-scale merger in Europe would not be easy — not just because of Germany's bank separation act and deliberations about introducing similar legislation across the EU.

He assessed the risk of a German bank becoming a takeover target as low, according to the newspaper, saying that even though Germany's thriving economy makes it an interesting market for foreign players, strong competition reduces the appeal.

Peters reportedly also criticized the ECB's negative interest rate policy, which is weighing heavily on German banks' profitability. The policy has had no, or just a very small, positive effect on the real economy because banks cannot fully pass on the negative rates to their customers, he told Handelsblatt.

He also argued that the ECB should start phasing out quantitative easing, saying that waiting until the fall to decide on how to proceed with the bond purchasing program would be too long, the newspaper reported.