Deutsche Bank AG (DB)

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New trial balloon: German industry proposing to bail Deutsche Bank to save the government from having to do so in an election year. Dirty confluence of money and politics...

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Private Sector to the Rescue

Handelsblatt 10/06/2016

BY MICHAEL MAISCH, JAN HILDEBRAND AND THOMAS SIGMUND

Several German blue-chip DAX companies are prepared to intervene on behalf of Deutsche Bank, which faces a potentially crippling penalty in the United States. The emergency rescue plan would spare the German government from having to bail out the bank during an election year.

The crisis at Deutsche Bank has moved the private sector to take action into its own hands as the German government refuses to consider a bailout of the country’s largest financial institution.

The chief executives of several blue-chip DAX-listed companies have discussed the situation at Deutsche Bank and are even considering a capital injection to rescue the bank from a potentially crippling penalty in the United States, according to information obtained by Handelsblatt.

The U.S. Justice Department has threatened Deutsche Bank with a €12.5-billion ($14-billion) fine stemming from the sale of mortgage-backed securities in the run-up to the 2008 financial crisis, but Deutsche Bank has only set aside €5.5 billion to cover its legal risks.

Under the emergency rescue plan, the participating DAX companies would purchase Deutsche Bank stock to help shore up the financial institution’s modest reserves. The capital injection under discussion is in the low, single-digit billion euro range, according to Handelsblatt sources.

https://global.handelsblatt.com/edition/530/ressort/finance/article/private-sector-to-the-rescue

At the same time the IMF is warning on European banks.

IMF Warns on European Banks

Handelsblatt 10/05/2016

BY MICHAEL BRÄCHER AND ANKE REZMER

European banks are struggling to cope with low interest rates, wide ranging fines and regulatory changes. In its annual global stability report, the IMF recommends they focus on profitability and cost cutting.

https://global.handelsblatt.com/edition/529/ressort/finance/article/imf-warns-on-european-banks