Deutsche Oxymoron

 

 

 

Deutsche Bank has been a big deal in world banking for many a decade. At one point, it was the sixth biggest bank in the world and as respected in Manhattan as it was in Munich. In 2008 when the financial crisis led European stalwarts such as UBS and Credit Suisse to seek bailouts, Deutsche weathered the storm on its own.

 

But unlike those banks that downsized in the wake of the global crash, Deutsche Bank arrogantly continued regardless. Germans accused of arrogance......who’d have thought it!

 

Instead, Deutsche Bank is now paying the price for its army of Investment Bankers that are employed across more than 70 countries that took risks that it could not support. As a result, Deutsche Bank is under the most pressure a major lender has faced since the 2008 financial crisis.

 

So, what’s caused it?

 

Deutsche Bank has been under intense pressure since US authorities said last month that they were to fine the bank $14 billion to settle an investigation (mis-selling mortgage backed securities, manipulating Libor rates and fixing gold prices). After a recent share price slide, Deutsche Bank isn’t worth much more than the fine.

 

The current situation was perfectly summarised by the International Monitory Fund when it described Deutsche Bank as “the world's most dangerous bank“.

 

Rather alarmingly it also declared......"If Deutsche Bank goes down, everyone else has a problem too".

 

Clearly this is far from the German efficiency model we have come to expect with German business……let’s hope that the German Government can negotiate more efficiently and reduce the size of the fine.

 

Banking crises is soooooo last year…..or is it!