Oh Scheisse

at

risks

Gülpen.

Deutsche Bank AG is the riskiest financial institution in the world as a potential source of external shocks to the financial system, according to the International Monetary Fund.

“Among the G-SIBs (globally systemically important banks), Deutsche Bank appears to be the most important net contributor to systemic risks, followed by HSBC and Credit Suisse,” the IMF said in its Financial Sector Assessment Program. The IMF also said the German banking system poses a higher degree of possible outward contagion compared with the risks it poses internally…

Deutsche Bank Poses Greatest Risk to Financial System, IMF Says — 2nd Update (Nasdaq)

Thanks Nelly Bergman

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20 thoughts on “Oh Scheisse

  1. fluffybiscuits

    If Germany catches this cold then Ireland gets pneumonia

    “In particular, Germany, France, the U.K. and the U.S. have the highest degree of outward spillovers as measured by the average percentage of capital loss of other banking systems due to banking sector shock in the source country,”

    If so many of the banks are interlinked thus way it could spell trouble then for other investors and a domino effect…

  2. Plyskeen

    Before anyone writes the topical answer that German banks are amongst the safest of the world, I would like to remind them that they burned their fingers in pretty much all the recent economic crisis, such as:

    * American subprime and real state bubble / financial crisis
    * Polish bank crisis
    * Icelandic crisis
    * Spanish real state bubble / banking crisis
    * Greek crisis
    * Portuguese crisis
    * Irish real estate bubble / banking crisis

    …so this article does not really come as a surprise at all to anyone that has been paying attention.

  3. Eoin

    DB tried to sell their deposit banking wing. That’s customer accounts. Here’s a bank that does so much business betting on derivatives with borrowed money that they no longer feel the need to take deposits…or do ACTUAL banking. I’ve just been checking this chart out on Zerohedge who have been warning about DB for over a year. Fair play to Broadsheet. This needs to be news. Deutsche Bank is screwed. It’s derivatives exposure is beyond all reason. Their short bets are costing them billions annually and they cannot unwind them. This bank will collapse and it will collapse hard. It will take the rest of the system with it via contagion. This WILL happen. All the elite institutions are now WARNING the world about it. IMF just joined the list today. They don’t want to be held responsible for not warning people. It’ll be the press that get it in the neck for failing to warn us about DB.

  4. perricrisptayto

    …so this article does not really come as a surprise at all to anyone that has been paying attention.
    Precisely.
    This has been known for a long time but conveniently ignored and covered up by all the so called experts in the media. The French ,Spanish and Italian banks are no different.
    However,Deutche Bank is the one that will finally collapse the house of cards.
    Watch the mainstream express their collective “disbelief” that this is news.

    1. Plyskeen

      Watch out for the small, regional German banks as well – do not forget that Merkel insisted that they remain out of the ECB’s supervision, like all the medium-to-large sized banks in Europe. There’s probably quite a lot of trash there (kind of weird, since they are mostly commercial and not investment banks), and it is a matter of time before it shows up.

      @Eoin: Glass-Steagall FTW! On the other hand: Eurobonds. Next year. Most likely. A DB bail-in brings giggles to any non-German economist, though, but nobody thinks that it is going to happen.

  5. Eoin

    The point is the Fed and ECB bailed out the banks last time. Now there is no entity big enough to bail out DB.

  6. Eoin

    They’ll blame any chaos on Brexit no doubt. Though no doubt DB has some exposure to UK banks, so I doubt Brexit is helping.

  7. stretch music

    *puts on hard hat, completes tesco order of 300 tins of baked beans, cancels sky tv, orders a few more tins of beans just in case….

  8. Mike Oxlong

    I would be interested to see what ATE “Additional Termination Event” clauses are written in to the ISDA language of their OTC derivatives. It could be interesting if counter-parties exercise and all try to unwind at once.

  9. Eoin

    DB share price is down 4% already today. And that’s with ECB intervention. Wolfgang Schauble has pretty much admitted that the ECB has been managing markets through purchases since (and probably before) the Brexit. Hence the relative calm. Also, Italy tried to push through a 40billion Euro bail out deal for her banks the day after Brexit, which Merkel has just vetoed. And Greece is in need of her next bailout next month too. All bad for Deutsche Bank.

    1. Kieran NYC

      Their US branch got spanked by the Fed yesterday too. For the second year in a row.

      Madness that they haven’t gotten their house in order. The regulators and central banks have been deliberately looking the other way to let them do it quietly so it wouldn’t cause too much chaos when they inevitably have to step in.

  10. Kevin M

    In 2012, DB was exposed to $74 trillion in derivatives. The Global GDP is about $75 trillion per annum.

    If DB falls, it’s mad max.

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