HSH Nordbank, for instance, once the biggest shipping lender in the world, had to be rescued by two German states in 2009. The bank has agreed to sell its loan portfolio worth 1.64 billion euros ($1.86 billion) to clean up its balance sheet and it has to be sold before the end of February 2018.

“Many banks, as the entire economy, have missed the train of digitalization and need to invest big time now,” Brzeski added.

“With the need for investments and the pressure from low interest rates, the pressure on many banks has increased. Do you hear politicians talking about it? No, not a topic which will win elections,” Brzeski said.

German officials have nonetheless focused on the European Central Bank and its loose monetary policy as being the major drag on the German banking system.

Wolfgang Schaeuble, the German Finance minister, has said on a few occasions that the ECB needs to tighten its policy, which is also leading to an increase in Germany’s export surplus.

“Lower and flatter yield curves are compounding these issues by gradually eroding margins, especially in smaller retail banks,” the IMF recognized last May.

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