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European banks desperately need a fully formed banking union to compete with the world's most valuable financial institutions, according to the chief executive of Germany's biggest lender.
"We have to accelerate the banking union and revitalize the concept of a capital markets union in Europe," Christian Sewing, CEO of Deutsche Bank, said at Frankfurt's European Banking Congress on Friday.
A Europe-wide banking union was initiated in 2012 as a way to prevent further financial shocks and to separate sovereigns from their banking systems. But it is still not entirely complete, with a European deposit insurance scheme yet to be finalized.
"To create the banks which Europe needs we have to establish a larger market and actually a single market. This is necessary to facilitate both organic growth and consolidation among European banks, both of which are needed in the long run," Sewing said.
"If we consolidate, if we get digitization right and, yes, I can't miss it dear President Draghi, if we get a little support from the European Central Bank (ECB) with a normalized interest rate environment then European banks will have it easier again to grow and also compete globally, " he added.
Ultra-low interest rates were brought in by the ECB after the euro sovereign debt crisis of 2011, though they are expected to start rising again at the end of summer 2019.
Rising rates are good for banks as they are then able to lend out money to investors at a profitable rate of interest. Whereas, in the current environment, European banks are limited in their ability to make profits.
What Europe's banking union has implemented, however, is the Single Supervisory Mechanism, which has seen the ECB take on certain supervisory tasks over the EU financial system, and the Single Resolution Fund.
Funded by euro zone banks, the Single Resolution Fund has been used as a last resort to rescue struggling banks in the bloc.
Yet, while the region's banking union has evolved over the last couple of years, some member states remain cautious about integrating their banking systems with others across the region given certain discrepancies throughout the euro zone.
On Friday, Deutsche Bank's Sewing said it was "a pity" to see that attempts to restore European integration had "failed to gain real traction" in recent months.
He also warned that the growing prominence of nationalist and euroskeptic lawmakers in countries across Europe represented a "major risk" to democracy in the region and to the bloc's liberal economic order.
Deutsche Bank's shares are down more than 45 percent since the beginning of the year, with the embattled lender seeing a slide in profits, slow client activity and pressure to consolidate in recent months.
— CNBC's Holly Ellyatt contributed to this report.