negative impact of high EPU The greater negative impact of high EPU on SME lending can be linked to demand- or supply-side effects. SMEs may invest less and thereby demand fewer loans during episodes of high EPU. Indeed, large corporations may have a larger international client network, and their investmentsRead More →
Greater capital scarcity As the industry is forced to deal with relatively greater capital scarcity, it has to concentrate harder on generating a return on that capital for shareholders. One way of thinking about this is a move from a world where lots of capital is chasing relatively few resources,Read More →
Structural challenges, in particular a lack of qualified labour Quite apart from cyclical developments, the German industry is faced with numerous structural challenges. “Industry 4.0” is certainly an important topic for companies, but the management boards differ in their approach. In fact, the issue is still quite abstract. However, companiesRead More →
EPU tends to affect SME lending disproportionally The transmission of EPU to bank lending could differ with respect to firm size as well. Indeed, when bank lending is constrained, small and medium-sized enterprises (SMEs) tend to be affected more than larger corporations, which are usually less dependent on bank loans.Read More →
Discom designs Discom designs and manufactures exhaust systems. The energy market is one of Discom’s specialities, and Germany is an important sales market in this regard. Discom develops tailored systems for power stations, temporary and emergency power systems and CHP installations. Noise reduction, emission limitation and reuse of waste heatRead More →
Rental inflation likely to remain sluggish, despite booming housing market — Of the components of the consumer price basket, rents are the key driver of overall inflation. Whilst the media regularly report on the strong uptrend of rents, the official CPI statistic is free of it. Over the past tenRead More →
family-owned companies — The fourth feature is the family-owned companies that are not publicly traded but are of a similar size to those that are. Well-known examples include retailers such as the Schwarz Group (Lidl) and Aldi (split in Germany between North and South) and industrial heavyweights such as Bosch,Read More →
EPU is transmitted to the real economy Hence, banks could turn out to be a central channel through which EPU is transmitted to the real economy. EPU’s negative spillovers are not only possible via heightened stock market volatility and higher bond spreads, but also through subdued funding of the privateRead More →
Forces Pushing Capital Decline The forces pushing for capital discipline are already at work. The collapse in oil prices over the past two years has forced integrated groups to commence the process of portfolio repositioning more aggressively than might have been the case. Firms have done this by shredding capitalRead More →
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