Saturday, October 1, 2016

Deutsche Bank-share price crashes: How bad is it really? –

Deutsche Bank does not come to rest. Even speculation about possible state aid, the money the house had to defend themselves. Despite the denial, as entitled to the Worries, Germany’s largest credit institution? The answers in the Overview.

In the financial markets, the shrill alarm bells: The share price of Deutsche Bank falls from a record low to the next: in Germany, temporarily, under 10 Euro, for the first time in history. On the eve of the course were to smoke out in New York.

in addition, insurance against non-payment of the money house are more in demand than ever – and now there are reports that the first hedge funds pull their money at the largest European investment Bank. Some investors are already seeing Parallels with the demise of Wall Street Bank Lehman Brothers, whose collapse in the autumn of 2008, the global financial system to falter. So, how bad is it really to the Deutsche Bank?

keywords: banking crisis

you have to take at least in Germany, the Worries in front of it. “The profitability of German banks is low, and the low interest rates reduce the profits of the banks. If this Situation continues, increase the risks of a crisis,” warns the President of the Ifo-Instuts, Clemens Fuest. Also among the actors on the stock exchange, the nervousness is increasing, as Jochen Stanzl from the Broker CMC Markets says: “The spectre of a new banking crisis is in the financial markets.”

attempted to take the European Central Bank (ECB), the market is the fear: “The banks are undercapitalized today, ( … ) very much better than it was before the crisis, and also the supervision has done a lot,” says Sabine Lautenschläger, ECB Executive Board member and Vice-Head of the ECB Bank supervision, in the “Börsen-Zeitung”.

where are the specially to the German Bank?

For years, the Frankfurter, it is difficult to generate decent profits, especially in comparison with her successful Wall Street rivals. The consequences of low interest rates and the increasingly stringent rules by the Supervisory authorities, the loads on the shops. Add to that the never-ending litigation and the radical changes due to digitalization. This makes the Deutsche Bank vulnerable and at the mercy of speculators.

What is the actual trigger for the crash?

Dramatically amplified Concerns about the German Bank, after two weeks ago, a criminal requirement of the U.S. Department of justice, over $ 14 billion for mortgage transactions from the time before the financial crisis, the Deutsche Bank has fallen since then in the stock market. Of concern, even if the share price after the recent signs that the penalty is actually significantly less likely to be again recovered somewhat. Nevertheless, uncertainty remains, and that is poison to the mood on the stock market. In addition, a report for agitation, after which the first customers to be nervous. Some of the hedge should have deducted funds at Deutsche Bank.

If this would phenomenon to a mass, would have serious consequences: If a Bank the Cash runs out, you can no longer meet their current obligations. That would destroy any trust and, therefore, the most important capital in the financial market. Experts such as Kepler-Chevreux-Analyst Jacques-Henri Gaulard keep panic, however, is inappropriate. In terms of liquidity, the Bank is significantly better than even a few years ago.

Lehman Threatens at Deutsche Bank?

Deutsche Bank is far from such a state, according to the assessment of many experts. The Balance sheet ratios are robust, says Jörg Rocholl of the scientific Advisory Board of the Federal Ministry of Finance. In the past two decades, the Bank has never been safer than at present, stressed the Chairman of the Board John Cryan. The group has free funds of more than 215 billion euros.

“The German Bank has a lot of problems, but liquidity none,” says Stuart Graham, the Autonomous Research. The Bank also helps its extensive deposits business with private individuals and corporate clients – this was not the case for the pure investment Bank Lehman Brothers.

Why are investors so nervous?

the Bank’s chief Cryan looks at some of the forces at work that want to weaken confidence in the Bank. And in fact financial bets investors on falling prices in the German Bank – and so reinforce the downward trend. In the summer of of billion, made heavy star investor George Soros as one of these so-called Short Seller. The back cover gets the Deutsche Bank, however, analysts, other financial institutions, which hold the slump in the share price is exaggerated. Get out of the vicious circle to break out, need the Bank is, however, desperate for good news, says Goldman-Sachs-expert Jernej Omahen. Especially a settlement of the litigation would be immensely important.

Could fill in the state?

To the rescue of an ailing institution will be asked according to the new European rules first, owners and creditors and then to pay. Only in case of extreme emergency, the state can step in to prevent a new conflagration in the financial system. So far, all the parties Involved to assure, however, that there is in the case of the German Bank has no current plans to make the fresh memories of the financial crisis, when taxpayers had to prop up with billions of many money houses. If the pressure on Deutsche Bank to continue, should German Chancellor Angela Merkel (CDU) to think again about state aid, says Bank Professor Hans-Peter Burghof of the University of Hohenheim in the “daily mirror”.

Why is the US competition is so much better?

Many experts see the consistent approach of the US authorities after the recent financial crisis of 2007/2008 as the main reason: The USA had hundreds of banks go bankrupt, many large banks, was prescribed, and its capital buffer. The Institute could not get on the market fresh money, they had to accept state aid.

Legal disputes have been worked on both sides of the Atlantic rapidly, while in Germany, Deutsche Bank is still beating with expensive Legacy issues from the days before the financial crisis. In the first half of 2016, the ten to the balance sheet total of the largest banks earned in Europe to just over 22 billion euros, as the consulting company EY is calculated. The comparison group in the USA came up with the equivalent of 47 billion euros to more than Double.


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