Eight years ago, the markets were seized with the panic: Lehman Brothers collapsed. And currently there is a real threat of repetition of events, only this time with participation of the largest bank of Germany – Deutsche Bank, Vesti.Ekonomika reports.
Anyway, this is what the market participants are afraid. The shares of financial giant once again slumped to a record low, losing almost 7% as per the results of New York session. By the way, currently the largest bank of Europe costs cheaper than Twitter.
It was caused by the Bloomberg’s message that 10 hedge funds decided to refuse from the services of the largest bank of Germany on clearing derivative transactions. So, if the professional market participants withdraw funds from the bank, then those, who hold deposits in it, should give it some thought.
The market feels jittery. Amid the events around Deutsche Bank, the shares of other banks, including US banks, also go cheap, similarly to 2008. It is clear that the problems of such giant will snag the while financial system.
In reality there are no reasons for concerns, the authorities and the representatives of the bank continue to calm down the public. Almost each day it is declared that the fears are exaggerated and the bank standing is more than stable.
Meanwhile, the experts remind that Deutsche Bank is the time bomb with the explosive power of 42 trln euros. This is the exact amount, for which the bank’s derivative transactions are appraised. This is, by the way, ten times more than Germany’s GDP.
In addition, the US Department of Justice claims payment of the fine, amounting to $14 bln, and it is the overwhelming task.
If the market participants continue to withdraw Deutsche Bank funds, then the problem will become more serious. Furthermore, if everything is fine, as the European authorities assure, why do the basis swaps, indicating the need of European banks in dollars, signal about the critical shortage of liquidity?
Or why has the demand in seven-day USD loans from ECB risen lately by 2000%?
