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First, the first year of European banking supervision went smoothly. Of course there are still a few things that the Bundesbank can improve upon, but it is working on them.
Second, many of the items on the Basel Committee's reform agenda have been ticked off, and the entire list is expected to be finished by the end of next year. The Bundesbank is committed to regulatory certainty, since it enables banks to plan for the long term on a robust basis.
Third, German banks have further increased their stability - capital ratios have continued to climb; leveraging is down further.
Fourth, German banks are suffering from persistent low earnings. Although the low-interest-rate environment is not yet making itself felt in this regard, looking to the medium to long-term future, however, small and medium-sized institutions in particular look set to feel the pinch.
Germany's banking sector has become much more stable since the crisis, but some major challenges still need to be tackled - the low-interest-rate environment and weak earnings, to name but two. These are challenges that banks must overcome in order to assure their stability and profitability.