DAY ONE
Geopolitical fragmentation dominated discussions of the global economy, particularly the US’ perception of China as a political and military challenge. The outcome of the US presidential election holds significant implications for Europe, with uncertainties surrounding how policies relating to Nato, Russia and China might differ under the Donald Trump administration versus the Joe Biden administration.
Europe has a number of comparative advantages, including a strategic location between US and Asian markets, manufacturing strength and diversity of member states. Structural issues such as capital markets union and a coherent industrial policy were noted as crucial for Europe's future integration and competitiveness, though they require significant political will and reform.
Common challenges across European countries, such as demographic changes and productivity growth, necessitate a more unified approach to policy-making and economic reform. But panellists also noted that the divergent economic developments within Europe, particularly between southern and northern economies, raise questions about the European Central Bank's reaction function and the need for coordinated policy responses.
DAY TWO
Monetary policy divergence is likely to be a key driver of markets going forward. The European Central Bank is eager to cut but the Federal Reserve is more hesitant since US demand-side inflation is proving sticky. This will support the dollar and make the US an attractive investment destination, but there is value available in Europe, particularly at the long end.
Discernment is becoming increasingly important. With higher rates, sustainable businesses are showing their quality but deep research is key to differentiating these assets.
Capital markets have provided a great deal of funding at competitive levels for primary markets. A clearly communicated and well-defined strategic approach is necessary across asset classes, but investors have the capacity to absorb high levels of issuance, if well-flagged.
Real estate markets have been struggling for obvious reasons but, with innovation at the level both of construction and financing, the industry can adapt to a new and challenging environment.
DAY THREE
Deutsche Bundesbank President Joachim Nagel's keynote speech suggested that he is warming to the possibility of European interest rate cuts starting in June. But he warned against expectations that a series of monetary easing moves is under way. He is ‘not fully convinced’ yet that inflation is returning to the European Central Bank’s 2% target in a ‘timely and sustained manner’.
Discussions on digital payments underscored the urgency of establishing standards for trusted infrastructure. While emerging technologies like artificial intelligence and distributed ledgers are promising, regulatory oversight remains crucial for security and compliance. Cash on chain and assets on chain go hand in hand – realising the full value of a digital ecosystem will require cash on chain. Speakers hope to see a wholesale central bank digital currency issued in euros soon.
There is a need to address the shortfall in climate and transition finance, especially for developing countries. A range of new financial products, instruments and schemes are being developed to increase the financing opportunities available to countries and companies for their decarbonisation efforts. However, some speakers noted that we ‘do not need to reinvent the wheel’ with new products and schemes but should focus instead on hedging against traditional challenges like currency fluctuations and foreign exchange risk to ramp up private investment in emerging markets.
Attended in person by over 350 of the bank’s institutional and corporate clients, DZ BANK’s Capital Markets Conference was an excellent opportunity for colleagues and clients to connect and understand the key factors influencing geopolitics and capital markets. Next year’s conference will be held again in Frankfurt from 28th to 30th April 2026.
Registration will only be possible with a personal invitation, which will be sent out well in advance. Registration is currently not possible.
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