Will Deutsche Bank Be Saved from Collapse?
by David Kranzler
Investment Research Dynamics
Deutsche Bank stock is down over 8% today. It’s trading at $15.53. This is 20% lower than the previous low it hit at the apex of the great financial crisis (de facto collapse) in 2008/2009.
With rumors flying because of DB’s stock performance this year, management issued a statement defending the bank’s liquidity position: LINK “Additional Tier 1 coupons” references the debt that was issued as part of a transaction to raise Tier 1 regulatory capital by Deustche Banks. The accounting behind the scheme – yes, it’s a scheme – is complicated but the regulators permitted DB is issue a security that behaves like debt but is treated as Tier 1 capital for the purposes of measuring the bank’s ability to withstand hits to its asset base.
Suffice it to say that historically, when a bank has been forced to issue a statement defending its solvency, insolvency is not far behind. We saw this with Bear Stearns and Lehman. Denial of a catastrophic problem is affirmation that the problem is very real.
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Source: http://financialsurvivalnetwork.com/2016/02/will-deutsche-bank-be-saved-from-collapse/?utm_source=rss&utm_medium=rss&utm_campaign=will-deutsche-bank-be-saved-from-collapse
