There is a bank with 27.2 billion of revenues and 5,7 of profits. which in the 2022 made more profits than the last ones 15 years. A bank announcing its intention to repay a subordinated bond early Tier 2 and $1.5 billion. And that very bank unleashes panic on the world stock exchanges. And it crosses the entire credit sector. With the consequent increase in the cost of insurance protection against default risk. The story of Deutsche Bank it is emblematic because it demonstrates that no one is safe in a crisis of trust. And that reputation today is worth more than accounts. As in the case of Credit Suisse. Which fails to reassure the markets even with the announcement of a merger with Ubs. Because if a credit institution is so powerful, it could always have some flaws.
The fear of the markets
On paper, he explains today The printthe accounts of Deutsche Bank I’m OK. The financial statements show an all-German solidity. But after the emergence of some cases of money laundering and fraud involving his customers the European Central Bank and the German credit supervisory board Bafin they declared themselves dissatisfied with the internal clean-up. In the 2012 It is in the 2018 the police carried out searches of the institute for evidence of money laundering and fraud. While at the time of the subprime loans Deutsche Bank had sold the “toxic” securities to customers. Receiving a fine of $7.2 billion by the US authorities. Then came the penalties for rigging the data of Libor ed Euribor, the two reference rates on which variable rate mortgages depend. And the recycling of 10 billion on behalf of large and wealthy Russian clients. Christian Sewingmanaging director for five years, has put the accounts in order.
Money laundering and fraud
But the bank did not meet the targets set by the money laundering authorities except at 50%. For this the Supervisory board of the bank has cut the compensation of senior executives. While the merger hypothesis with Commerzbank. Whose majority shareholder is dal 2008 the German state. Germany is trembling because its credit system has generally lost value and above all trust. Indeed, according to the International Monetary Fund German banks are the least profitable in Europe. Because they think about maximizing internal results rather than profits. Chancellor Olaf Scholz took the field in defense of the German giant: «Deutsche Bank has substantially modernized and reorganized the way it works and it is a very profitable bank, there is no reason to worry».
Reassurances without solutions
While “the EU banking system is robust and safe” and has “the necessary control structures”. French President Emmanuel Macron is on the same wavelength, according to whom the banks of the Eurozone “are the most solid and in this context we have discussed accelerating the creation of the banking union”. While Christine Lagarde assured that the ECB is closely following the situation on the markets, ready to intervene if necessary. European banks have solid capital and liquidity positions to act as a barrier to the attacks of speculation, which moves at ease in illiquid markets such as those of credit default swap. Lagarde has not tied her hands on rates: in this context of great uncertainty, the ECB will decide from time to time on the basis of financial and macroeconomic conditions. But reassurances without solutions are not enough.
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