The financial stability crisis of Deutsche Bank (Deutsche Bank ) is the situation in which Deutsche Bank found itself in the fall of 2016 after repeatedly voiced doubts about the adequacy of the bank's liquidity and allegations of fraud in mortgage lending by the US Department of Justice in 2007-2009.
Content
- 1 Background
- 2 crisis
- 3 Reaction
- 4 Criticism
- 5 See also
- 6 notes
- 7 References
Background
After the financial crisis of 2008, Deutsche Bank was in a difficult situation and was recovering extremely slowly. After a series of scandals related to aiding money laundering, including in the Moscow branch of the bank, the bank decided to start the changes [1] [2] [3] [4] . The restructuring of the business [5] was supposed to improve the position of the bank, but this did not happen, the bank still showed weak performance. The situation was complicated at the beginning of 2016, when investors became interested in the bank’s predisposition to risks in the energy sector and the likely shortage of cash.
The next step that shook the confidence of investors was the actions of exchange traders who speculated on the balance sheet of the bank’s derivatives, in their estimates there was a huge spread, from $ 43 trillion to $ 73 trillion [6] .
Crisis
A strong influence was exerted by the IMF publication “Financial Sector Assessment Program” [7] [8] in June 2016, in which Deutsche Bank, because of its activities, was assigned the main role in threatening the stability of the global financial system among global systemically important banks (GSIBs) . Later, the US branch of Deutsche Bank did not pass the stress test of the US Federal Reserve System. The Fed argued the failure of poor-quality risk management and financial planning of the bank.
The main factor in its current situation, despite the above reasons, is the proposal of the US Department of Justice to suspend the investigation of the Bank for fraud with US mortgage securities ten years ago (during the crisis of 2007-2009) for a one-time payment of a fine of $ 14 billion [9 ] , which is 83.4% of the bank's capitalization. This proposal is unbearable for the bank, because it doubles the amount allocated to cover legal costs, and its capitalization is currently only about $ 16.8 billion [10] .
Reaction
These events contributed to increased fears among investors and partners of the bank about the lack of capital and entailed the departure of several large hedge funds from Deutsche Bank [11] , which refused its clearing services. This provoked a drop in the bank's stock quotes to the lowest level in the company's history - 9.93 € [12] per share.
The German federal government, which has long held a neutral position, denies any possible assistance to the bank, [13] however, according to government sources, it has prepared an “emergency plan” for emergency [14] .
It is reported that at present, the US Department of Justice and Deutsche Bank have been able to agree to reduce the amount of the fine to $ 5.4 billion [15] .
Criticism
It is believed that the allegations from the US Department of Justice are partly greatly exaggerated and the amount of the fine would be substantially less if one of the major banks in the United States were charged [16] .
Experts criticize, among other things, Deutsche Bank itself for its short-sighted strategy and the mass of dubious operations carried out by its branches around the world, which drove the bank to a greater extent in its current position [17] .
See also
- Deutsche bank
- US Mortgage Crisis (2007)
Notes
- ↑ Elites Undermine Putin Rail Against Tax Havens , International Consortium of Investigative Journalists . Date of treatment October 29, 2016.
- ↑ Deutsche Bank Helped Customers Maintain Hundreds of Offshore Entities , International Consortium of Investigative Journalists . Date of treatment October 29, 2016.
- ↑ Deutsche Bank suspected its Moscow branch of money laundering , RBC . Date of treatment October 29, 2016.
- ↑ Price of Offshore Revisited .
- ↑ Deutsche Bank. Deutsche Bank - Press Releases . www.db.com. Date of treatment October 29, 2016.
- ↑ Deutsche Bank hopes for Merkel , Gazeta.Ru . Date of treatment October 29, 2016.
- ↑ IMF. IMF Country Report GERMANY FINANCIAL SECTOR ASSESSMENT PROGRAM .
- ↑ The IMF has called the Bank , RBC , which represents the greatest risk to the financial system . Date of treatment October 29, 2016.
- ↑ Strasburg, Jenny . Deutsche Bank, US DOJ Continue to Discuss Mortgage-Securities Settlement , Wall Street Journal (October 3, 2016). Date of treatment October 29, 2016.
- ↑ Deutsche Bank hopes for Merkel , Gazeta.Ru . Date of treatment October 29, 2016.
- ↑ JanFoe, William Canny Jan-Henrik Foerster . Cryan Defends Deutsche Bank as Some Clients Pare Back Exposure , Bloomberg.com (September 29, 2016). Date of treatment October 29, 2016.
- ↑ SPIEGEL ONLINE, Hamburg Germany. Aktien-Crash: Deutsche-Bank-Chef gibt Spekulanten Schuld . SPIEGEL ONLINE. Date of treatment October 29, 2016.
- ↑ Nestler, Franz . Spekulationen über Staatshilfe: Ihre Größe wird die Deutsche Bank nicht schützen , Frankfurter Allgemeine Zeitung (September 28, 2016). Date of treatment October 29, 2016.
- ↑ Vor Milliardenstrafe: Spekulationen über staatlichen Notfallplan für die Deutsche Bank , Frankfurter Allgemeine Zeitung (September 28, 2016). Date of treatment October 29, 2016.
- ↑ JanFoe, Jan-Henrik Foerster . Deutsche Bank Jumps on Report of $ 5.4 Billion DOJ Settlement , Bloomberg.com (September 30, 2016). Date of treatment October 29, 2016.
- ↑ Mehti Mehdiyev - How speculation killed Deutsche Bank - IA REGNUM (Russian) , REGNUM . Date of treatment October 29, 2016.
- ↑ SPIEGEL ONLINE, Hamburg Germany. The Deutsche Bank Downfall: How a Pillar of German Banking Lost Its Way . SPIEGEL ONLINE. Date of treatment October 29, 2016.