Investment Banking MC
The Amazing Survival (So Far) of Deutsche Bank
Alan Kohler, The Australian
It is quite amazing that Deutsche Bank has so far managed to avoid a run on its deposits — has a bank ever worked harder to earn insolvency than this one? A year ago it announced a new CEO followed by a $2.5 billion fine for rigging Libor and a massive cost reduction. That was just a curtain-raiser. In January, it announced a €6.8bn loss; in February, the CEO told staff that the bank is rock solid — a very bad sign indeed; in March, it disclosed €52bn worth of derivatives on its books and then, on June 29, the IMF put out a report containing this statement: “Deutsche Bank appears to be the most important net contributor to systemic risks in the global banking system.”
The very next day, the US Federal Reserve followed up by announcing that Deutsche had failed its stress test. By July, the share price had halved, but Deutsche Bank was — groggily — still standing. Why any depositor would stick with a bank after all that is anybody’s guess, but, incredibly, it survived.
The rest of this article can be found at theaustralian.com.au.
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