Donald Trump's $14 Billion Conflict Of Interest

Banks also fell, led by a plunge in Deutsche Bank after the giant German bank said it wouldn't settle with the Department of Justice over its handling of mortgage-backed securities in the run-up to the 2008 financial crisis.

The German bank also on Thursday confirmed that it has started negotiations with the United States department of justice to settle the civil rights, which will raise the DoJ possibility of the issue and placement of mortgage-backed securities (RMBS) and related securitisation transactions by the bank between 2005 and 2007. Last week, a German magazine published an unconfirmed report that bank would be willing to enter a $2.4 billion agreement.

Jorg Eigendorf, head of communications and senior group director at Deutsche Bank, said that the bank had a "comfortable cushion" after the DOJ suggested that the bank pay $14 billion to settle a number of investigations related to mortgage securities.

The bank noted that the negotiations with Justice Department have just begun, and the USA agency has invited the company to submit a counter proposal as a next step.

Wall Street was near session lows late on Friday morning as Oracle led a decline in tech stocks and financials came under pressure in the wake of Deutsche Bank's mammoth $14-billion fine. Deutsche Bank's US -listed shares were down 9.2 per cent. "Our estimates for RBS and Barclays assume a respective $2 billion and $1.1 billion of DOJ settlement costs".

The bank's shares have lost half their value this year, dropping from 7.6 percent to 12.10 euros.

Earlier this year, the DoJ agreed a five billion United States dollar (£3.7 billion) settlement with Goldman Sachs over similar claims.

Dr Plath expects a final settlement of about US$4 billion to US$5 billion. Still, the figure seemed to be much more than Deutsche Bank expected.

Other big banks have reached deals in recent years with U.S. authorities over their mortgage activities in the run-up to the financial crisis.

Deutsche Bank's settlement will comprise a different list of recipients from the Goldman case, a source close to the matter said, adding that the lender had already settled some claims three years ago. The penalty, though preliminary, would rank among the largest that banks have paid to settle similar claims.

Deutsche Bank has been quick to describe the fine as an "opening position" and made clear it has no intention of agreeing to a fine at this level, which was first reported by the Wall Street Journal. Moreover, at the bank's annual shareholder meeting in May, Deutsche Bank CEO John Cryan outlined his expectation of a significant legal bill in 2016.

  • Zachary Reyes