That should give back never. The central tenet of the 2008 financial crisis and the subsequent euro crisis in 2012 was: Banks should not be dangerous for States. The financial system must be so stable that it can handle any difficulties – must bleed without the taxpayer.
These days, this object is subjected to an unexpected stress test. Germany of that in the banking reform had occurred loudest, gets to feel as if the leading money house the nation provides so much negative bustle that markets take the creditworthiness of the country targeted. Not only German bank chief John Cryan and his CFO Marcus Schenck who soothingly appealed to employees and the public. The Institute is very solid and have sufficient capital to meet its obligations. Even the finance minister had over the financial agency Bloomberg to make clear that he does not worry about the most important money house of the country make up.
bankruptcy risk of Deutsche Bank has doubled
In the wake of dramatically poor financial results, the stock is at a historic deep crashed. Also on Tuesday there was a decrease of temporarily more than six percent impact. No Dax value was poor. But since the beginning of the paper has lost nearly 42 percent of its value. At the stock exchange the industry leader of the fourth largest economy in the world is rated only 21 billion dollars.
In the figures, the massive loss of confidence that the markets have placed the Institute reflects. The actors quantify the risk that gets the German bank in the next five years in financial difficulties, to over 17 percent. This is more than to weddings the euro crisis in 2012. A few days before the theoretical bankruptcy risk was eight percent.
the problems of money house are now considered grave believed by the markets that even the financial reputation of Germany suffers , With a few days delay the default risk German government bonds is rated higher now. Within a short time it has increased by nearly 70 percent. Although the bankruptcy probability is still low at 1.7 percent.
However, the vigorous movement shows that Germany is not immune to ailing banks and taxpayers should be asked to pay the event of damage to the German market leader should enter , Also apparently a thriving bank of international standing is considered essential, so an economy can play in globalization.
JP Morgan is almost ten times the size
But from this erstwhile claim appears the German bank now to be light-years away. The image of the house is so damaged that it threatens to fall behind the global competition. Wall Street giants such as JP Morgan are on the market now almost ten times as valuable as the Frankfurt and go back a double-digit billions in profits. There was a time when acted both institutions on an equal footing – that is long gone
And the sheer size one entirely in the banking business. Only those who brings a great weight on the market balance, also quickly transfer large quantities can get to the capital, when it is necessary. It could happen, therefore, that the slump draws a gradation for the rating to be.
The rating agency Moody’s, the Institute already from A3 downgraded to Baa1 end of January, rival S & P took this step last summer anticipate. But the rating agency Fitch Approves Bankhaus still an A-. If it goes to the markets, the Institute has nearly lost its solid credit status. According to Reuters, the rating of the credit markets is only just at BBB-, almost to “junk” status.
When market value not only the major competitors of Deutsche Bank who run the place. Even institutions from the second row are in the stock market now worth more. This includes, for example, the KBC Group, a Belgian bank, which had to be rescued after the financial crisis facing bankruptcy. Or even competitors such as Russia’s Sberbank or Danish Danske Bank.
takeover target? – Probably not
More and more is therefore speculation about a possible takeover. Finally, especially the US banks earn now back billions, enough cash would be available. “I do not think that someone takes an investment bank right now,” says one of the top 10 shareholders of Deutsche Bank. The capital market business will never again reach the size that it had before the crisis, because it was simply too expensive. And at Deutsche Bank, a buyer would also need a lot of money in your hand to bring the cleanup to the end.
where you would get the institute currently for bargain price. On the stock market, the German bank is being traded even with 35 percent of their book value, say, at a discount of 65 percent. A collector selling the individual assets and so redeemed the book value of the balance sheet, could make a shock 65 percent gain. But obviously takes into consideration potential investors assumed that the carrying amounts still to be written off or still slumbering other problems in the balance sheet. They do not believe quick improvement.
Only at Commerzbank or problem banks in peripheral European stocks with a similarly high suspicion tee traded at book value. Again, cut the US Institute in reputation better. The Citi is only trading at a discount of one third, the US Size JP Morgan even at a premium of more than 20 percent. From so much confidence can in Frankfurt and Berlin only dream.
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