The recent demise of Silicon Valley Bank (SVB) reminded me of something I heard at a course I attended in London in 2000. One of the presenters was professor Ingo Walter of the Stern School of Business in New York. As a German finance academic living and working in the US, he was eminently qualified to comment on some of the key differences between the two countries, focusing  in particular on the way that banks and their customers behave.

Walter gave the example of someone who wanted to buy a new big-screen TV. If you’re in Germany, the first thing you’re likely to do is to look at your most recent bank statement. If you have enough money, great, go out and make the purchase, otherwise start saving until you can afford to buy it cash. Over the months that follow, the bank will pay you a measly interest rate on your deposit — “for that is what banks do, they screw you”, according to the good professor...

Subscribe now to unlock this article.

Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).

There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.

Cancel anytime.

Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.