Yet another German lender has announced it will end any speculative food trading after noting that such banking activities had proved controversial. The government in Berlin welcomed the move.
Germany's cooperative DZ Bank confirmed Monday it was stopping all food speculation trading after sensing a groundswell of public opinion against such banking activities.
Financial bets on the development of prices for maize, soya, wheat and other agricultural products also known as futures have been made responsibly by many experts for artificial price hikes and fluctuations on global markets and are believed to have hurt the poor in developing nations and elsewhere.
DZ Bank reported it would halt speculative trading in the sector by the end of the year, adding that its subsidiary, Union Investment, would also be affected by the measure.
Praise from others
"We admit that the low demand for such financial products currently has also influenced our decision," DZ Bank said in a statement filed to the Foodwatch pressure group. "We explicitly welcome and support endeavors by scientists to look into the impact of such speculative trading."
The lender followed Germany's Commerzbank, regional bank LBBW and Dekabank, which had denounced speculative food trading at an earlier stage.
Both Foodwatch and the government in Berlin welcomed DZ's decision to opt out of the business segment. "It's important to draw a clear line between responsible investments in the fight against hunger and transactions which may cause price fluctuations and thus increase hunger," a government spokesman said Monday.
Germany's biggest lender, Deutsche Bank, by contrast, has refused to end such speculative trading, maintaining there isn't enough empirical evidence for any correlation between futures trading and food price jumps.
hg/rc (Reuters, dpa)