Georg Fahrenschon, the president of the German Association of Savings Banks (DSGV), was asked to give a speech at ISM Dortmund entitled “Stable euro, strong economy – how Europe must act now”. ISM student Dennis Nathem describes the event from his perspective.
Georg Fahrenschon had been invited to speak at ISM. In other words, the head of the German savings banks and state banks, and therefore the man in charge of roughly 250,000 employees, was to speak to ISM students. It all sounded very interesting; although I must admit I didn’t know an awful lot about the man himself.
However, a little bit of research goes a long way. The 46-year-old Georg Fahrenschon is a member of the Christian Social Union (CSU) and has been the president of the German Association of Savings Banks (DSGV) since 2011. He was previously the youngest ever finance minister in the state of Bavaria. So it’s hardly surprising then that Georg Fahrenschon is a numbers man.
In an interview with German newspaper “Die Welt”, Fahrenschon sees his role as taking care of the savings banks. Apparently, he is always inclined to be on the side of the “small-time saver” and is not afraid to publicly speak out against Jürgen Fitschen, Anshu Jain, etc.
The lobbyist avoids risks and claims the most exhilarating thing in his life is his family. He typifies the staid and rather conservative image of the German savings banks to perfection.
“Stable euro, strong economy – how Europe must act now” is the title of the speech he was set to give at ISM. Fahrenschon has frequently criticised the ECB’s low interest rate policy in the past, as it means saving is no longer worthwhile and increases the risk of new bubbles.
Would this be the focus of his speech at ISM?
Fahrenschon arrived a few minutes late for his speech at the campus. This is, of course, excusable, but it’s not something I had expected. It’s interesting how the somewhat disproportionate picture of the bank boss painted by the media had actually influenced my opinion of him.
Georg Fahrenschon received an exuberant welcome from Dr. Ingo Böckenholt and Dr. Diethard B. Simmert.
Strangely, it appeared that Prof. Simmert had used the same “Die Welt” interview as I had to prepare for the evening even though he has known the guest speaker for many years. To break the ice he told the story of how Fahrenschon actually needed to be convinced by his own wife to complete his studies in business administration and economics. This provided the DSGV president with an opportunity to give those present a piece of sound advice: “Always be careful what you say in interviews – some anecdotes you can never live down.”
The official speech began with Fahrenschon singing the praises of Europe and the EU, “just in case you might get the impression that I’m a Eurosceptic.” The EU is the real guarantor of peace in Europe, and a stable euro is vital for a strong economy.
Fahrenschon spoke without notes or PowerPoint presentations. His political background became quite evident. He is easy to follow and never gets lost, not even in long-winded sentences.
His speech obviously had a political overtone. He repeatedly emphasised the advantages of small, regional financial institutions, and used every opportunity to stress and document just how crisis-proof “his” savings banks and the co-operative banks really are. The fact that state banks, which are jointly owned by the savings banks and, not without good reason, come under the same umbrella organisation (DSGV), also had to be rescued during the banking crisis was – understandably – not mentioned in his speech.
Fahrenschon also denounced the numerous bank regulations which he believes should not apply to savings banks. Even the smallest of savings banks with less than 50 employees must employ several full-time staff to monitor operations.
At this point I had hoped to present the actual content of the speech. But as an undergraduate student on a Communications & Marketing course I do not have sufficient background knowledge to undertake this task successfully. I have therefore decided to list some of the key points uncommented below.
• It is difficult to criticise the ECB as it simply uses the available resources to overcome the crisis. Nonetheless, a renewed cut in interest rates is not the solution. Rather, it should be the job of policy makers to adopt countermeasures and to stop shifting the responsibility to the ECB.
• Financial service providers will soon face the next crisis. They are currently “burying their heads in the sand”.
• When the going gets tough, the capital market turns a blind eye, but savings banks remain a reliable partner.
• Economic stimulus packages are basically a waste of time both in Germany and elsewhere. They may ensure a short-lived upturn, but the problems remain.
• Politicians must limit the creation of new money.
If you are interested in more details, I recommend you to read the script (in German) of the speech.
Georg Fahrenschon presented numerous measures that could be taken to confront the crisis, but the DSGV president failed to put forward a real solution. But was this really surprising? After all a real crisis is a problem that cannot be solved just like that.
In short, it was an interesting and successful evening. Even with my lack of financial knowledge, the speech still proved to be highly informative and offered insights into the European financial system.
In my view, these types of event should be held more often and ISM should use its excellent business contacts to achieve this aim. It not only provides students with additional opportunities to enrich their studies but also enhances the reputation of ISM. I guess the overcrowded lecture hall proves I am not alone in my thoughts.
It would also be a good idea to organise future events for other study areas.
Author: Dennis Nathem