Wednesday, 18. January 2017
More than seven billion dollars, the German Bank pays for the sale of windy real estate papers. It is the largest penalty that had to pay a Bank for the gambling deals: you’ve contributed to the financial crisis, the relevant judgments of the investigators.
The long-awaited settlement with the US authorities, is: For a total of 7.2 billion dollars, the German Bank places their long-running dispute with the U.S. Department of justice over dubious mortgage deals before the financial crisis to the files. Many large investment banks have made for the transgressions that were 2008 in the industry, already billions in fines. However, the drain, the Deutsche Bank paid now, is the highest punishment, which had to pay an investment Bank in the matter.
“Deutsche Bank has led not just investors behind the light, but contributed directly to an international financial crisis,” said US Minister of justice, Loretta Lynch. The Bank with the agreement, in the Grand style of rotten home loans bought up, bundled into new securities and then investors have passed on, although the Bank employees did not know that they were worth what they promised to investors.
The mortgage bonds before the financial crisis, the Golden goose of Wall Street. Deutsche Bank was one of the biggest players in these questionable Deals trusted. The papers were from 2007, with the downturn in the US housing market worthless, they ripped huge holes in the balance sheets of many banks. The losses brought the financial system to the brink of collapse and triggered the global financial crisis. Governments around the world, banks had to bail out with tax money.
“is not Mentioned in the prospectus”
Deutsche Bank, it drifted in the business with the lazy papers, especially the wild: in 2011, a study revealed report by the US Senate, you bet like Goldman Sachs back against the papers that you sold to your customers at the same time as a safer Investments. The gambling-shops-inspired Hollywood to the Blockbuster movie, “The Big Short”.
The agreement with the authorities now contains juicy Details about how the Deals were made and the Bank deceived its customers. The German Bank has confirmed it all. So employees are acknowledged internally, that the house were awarded loans in the Boom-time to any debtor who had “half a pulse”. Many of the loans on which the papers were based, were already pledged and produce, therefore, only of limited value as security. A supervisor at Deutsche Bank, his Team is instructed to conceal the fact the investors: “it Tells you verbally but not mentioned in the prospectus”.
For the violations will have to pay Deutsche Bank $ 3.1 billion penalty. The rest of the 4.1 billion dollars of the settlement amount included as compensation to consumers by the business practices of the Deutsche Bank damage. The Bank should adopt home builders are no longer able to pay their Rates, debt and the construction of affordable rental housing in the United States co-Finance.
“Our behavior is not acceptable”
German-Bank-chief John Cryan apologized in all clarity for customers and investors: “Our behavior in this matter in the years 2005 to 2007 do not meet our Standards and is unacceptable,” said the Briton. “We apologize unreservedly for this. We have withdrawn from many of the affected shops and our Standards greatly improved.”
The agreement with the U.S. Department of justice was already in December. Despite the record penalty, the German Bank is now off the hook. The Bank is able to Finance the billion-fine without further capital increase. Concerns about possible state aid for the German Bank are for the time being, off the table.
doubts as to its stability were triggered in the autumn of speculative attacks: The U.S. Department of justice, had let slip that the agreement in the Mortgage settlement could cost up to 14 billion dollars – she would have overwhelmed, possibly, financially. Completely out of the woods Deutsche Bank, however, is not. Also the money laundering scandal in Russia, a high penalty by the U.S. Department of justice.