Jim Rogers: Global financial system will collapse if Deutsche Bank fails
- Author: Zachary Reyes Oct 19, 2016,
Oct 19, 2016, 14:02
Qatar's royal family is also considering increasing its stake in Deutsche Bank to as much as 25 percent, according to people with knowledge of the matter.
Royal Bank of Scotland PLC (RBS.LN) (RBS.LN) shares were pushed 2.8% lower after reports of leaked documents appearing to show the London-based bank pushed small-business customers into financial difficulties in pursuit of profit.
While this Deutsche Bank-related confusion and its contagion might have an adverse impact on the European financial exchange-traded fund, the iShares MSCI Europe Financials Sector Index ETF (NASDAQ: EUFN), there are several other corners of investment which may feel the pinch of Deutsche Bank's issues.
The bank has been under intense pressure over the size of the fine. After that day's close, news surfaced that the DOJ was demanding $14 billion to settle the bank's mortgage lending activities during the housing bubble, before the recession.
Investors who bought into Friday's deal were clamoring for more, leading the bank to sell new debt for the second straight session - and show it still has significant access to funding.
"Crisis is the wrong word".
As per the source, Deutsche Bank has issued 20 exchange-traded notes (ETNs) as of now for US investors, though 19 of them are listed for trading. "A lot of worldwide and European clients want to continue to work with us", he said.
JPMorgan Chase CEO Jamie Dimon, Morgan Stanley head James Gorman and Citigroup boss Michael Corbat, did their version of the "Three Amigos", taking to the stage together to talk up the strength of the USA consumer and their own roles in the global economy. Mr. Cryan has said he expects USA authorities to scale back the initial request. The Return on Equity (ROE) value stands at -12.2%. Shareholders have been, so far, relatively patient.
He added that markets' febrility over the solidity of the bank suggests that the system put in place since 2008 may not be enough. He called for a separation of the banks' deposit and trading activities as a way to reduce their size, and to limit some of the risks.
"We should look at the complete picture", Cryan said, indicating the bank has more than 20 million customers - and reserves of more than 215 billion euros (US$237bn).
The Bank recorded the biggest drop on the stock exchange in Germany of large companies.
Germany's biggest lender, which has seen its share price fall as much as 22 per cent in recent weeks on fears that it could face a United States fine of up to $14bn, has been using the results of the July stress tests as evidence of its healthy finances.
"The transformation process is still ongoing and it is painful", said Alex Manson, global head of transaction banking at Standard Chartered Bank.