Could Deutsche Bank Collapse?
The German bank’s shares reached historic lows this week after a $14 billion settlement request by the U.S.
.. The International Monetary Fund said in June: “Deutsche Bank appears to be the most important net contributor to systemic risks” in the global market.
.. Lehman had $639 billion in assets when it collapsed, and it’s failure is attributed as the dirge that announced the global financial crisis. It was this lesson that led Deutsche Bank investors to believe that if the worst should happen, Germany would bail the Deutsche Bank out. But German Chancellor Angela Merkel has repeatedly said there would be no bailout, no matter what
.. Market Watch wrote that if Merkel kept her word, it meant she “has no idea how the financial markets work, and no appreciation of how much damage the unfolding Deutsche crisis is already doing to the markets and the eurozone economy.” On the other hand, a bailout has been called political suicide for Merkel and would likely ruin her party’s chance in next year’s election.
.. Those who do not believe the sky is falling have said a more likely scenario is that Berlin will pressure the U.S. to lower the $14 billion settlement request. Even without political intervention, that seemed already to be the outcome.