US fine for Deutsche Bank will DESTROY EU economy stability

C

cancel2 2022

Canceled
Whilst you cretins are banging on about fat arsed beauty queens and locker room banter from a decade ago, there is some serious shit going on in the world.

Jeroen Dijsselbloem, the chairman of euro zone finance ministers, said that the U.S. Department of Justice's demand that Deutsche Bank pay $14 billion for its role in the sub-prime mortgage crisis is too big and will undermine financial stability. "Let's hope it is an opening bid," Dijsselbloem said on the sidelines of the International Monetary Fund and World Bank annual meetings in Washington. "These kinds of fines are completely oversized, and they are damaging to financial stability."

Deutsche Bank has been struggling to overhaul its business model that is built around trading activities that have become much less lucrative under new regulation enacted since the 2008-2009 financial crisis. "Here is a financial institution which needs to be restructured and strengthened and needs to bring in new capital and we cannot then have an even bigger amount of capital being pulled out by the American authorities. That is really counter-productive to put it mildly," Dijsselbloem said.

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President of the Eurogroup, Jeroen Dijsselbloem

German Finance Minister Wolfgang Schaeuble earlier said that a new financial crisis could not be ruled out and that the IMF is backing up his longstanding warnings about the risks to the banking system from "ultra-loose" monetary policy. Speaking at a news conference to discuss Germany's leadership of the G20 major economy meetings in 2017, Schaeuble declined to answer direct questions about Deutsche Bank's health. But he repeated his sharp criticism of "ultra-loose monetary policy," which includes the negative interest rates and other unconventional strategies of the European Central Bank aimed at jolting Europe out of extremely weak growth.

"The danger of a new crisis has not completely vanished," Schaeuble said. IMF officials have said this week that Deutsche Bank needs to reassess its business model to maintain profits and capital in what is expected to be a long era of low rates that will pressure earnings. Deutsche shares rose on Friday after Reuters reported that Qatari investors who own a nearly 10 percent stake in the bank do not plan to sell their shares.
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http://www.express.co.uk/finance/ci...l-EU-economic-stability-US-fine-Deutsche-Bank
 
This has the potential to cause another financial crisis on the scale of the Lehmann Brothers yet all you fools can talk about is the "pussy tape", truly sad bastards!!
 
You can also be damn sure that Clinton will be even more vindictive than Obama, Trump is far from perfect but at least he understands business.

António Horta Osório, the chief executive of Lloyds Bank has read it; Peter Sands, the former chief executive of Standard Chartered, has most certainly read it; and Stuart Gulliver, the chief executive of HSBC, thought so much of the book that he hired its author. I suspect there isn’t a bedside table of a single European bank executive worth their salt that has not been graced by a copy of Treasury’s War by Juan Zarate. It is not hard to see why. It details how US Treasury and White House officials worked out that the dollar’s unrivalled position as the currency of choice for international trade provided them with a unique weapon against America’s enemies – and, increasingly, the world’s banks.

“In Treasury, we realised that private sector actors – most importantly, the banks – could drive the isolation of rogue entities more effectively than governments, based principally on their own interests and desires to avoid unnecessary business and reputational risk,” Zarate writes. US officials developed and deployed a variety of financial techniques against terrorist groups, organised criminals and enemy states such as Syria, North Korea and Iran.

So far, so fair enough maybe: after 9/11 the US government was fighting a war against terror, after all. But officials began to realise that these same techniques could be used to more prosaic ends – like, for example, forcing foreign banks around the world to reveal which of their clients were American citizens with more than $50,000 in investments (under the Foreign Account Tax Compliance Act) and to control the behaviour of the banks themselves.

Bully-boy tactics or condign punishment? Last year, the US Department of Justice fined General Motors $900m for hiding an ignition switch defect that resulted in at least 174 deaths. Now it proposes to fine Deutsche Bank $14bn for mis-selling mortgage-backed bonds. It doesn't take a moral philosopher to see that something is out of whack here.

We do not know for sure that the $14bn figure was leaked by a US enforcement agency. However, the journalist with the lead byline on the scoop about the fine covers enforcement out of the Wall Street Journal’s Washington bureau and it is pretty hard to see what Deutsche would gain from the leak. It is, however, easy to see what it has to lose – the German bank’s share price fell by a third after the story broke (although it has climbed back a little in the past couple of days).

Deutsche Bank is not in immediate danger of going pop. But it faces the very real possibility of slowly but surely leaking air, with revenues falling faster than its ability to cut costs. The bank's executives can claim they don't need to raise capital until they are blue in the face – it may even be true. But if the market makes up its collective mind that the looming DoJ fine (however big it ends up being) means that the German bank has to raise capital, then, ultimately, it has to raise capital. Bank balance sheets are a collection of best guesses, and their solvency essentially boils down to the wider world’s belief that they are solvent. Clients pulling their money, as some hedge funds are reported to have done in recent days, is not a good look.

That is why the price of insuring the bank’s debt against default in the event of bankruptcy has spiked this week. This is more worrying than the fall in the bank’s shares, which is in part a reaction to the possibility that Deutsche Bank will have to issue new shares at the expense of existing shareholders. If that proves to be the case, it does at least have the right man in the hot seat. In a previous life, Deutsche’s chief executive, John Cryan, was head of UBS’s financial institutions group, which specialises in helping banks raise money. He was also appointed the chief financial officer of the Swiss lender in September 2008, just months after a monster $15.4bn rights issue helped it stagger through the financial crisis (a much better comparison to what is happening to Deutsche now than what befell Lehman Brothers). As the one-time European president of Singapore’s investment company, Temasek, the German-speaking Yorkshireman also has ex-colleagues on speed dial with access to lots of money.

But timing is vital. The bank needs to raise equity and settle the litigation uncertainty as quickly as possible. However, if Deutsche raised fresh money before the negotiations are completed, the DoJ would likely rub its hands together and say: “Lovely, we’ll have some of that.” If the bank holds off it could, despite the public declarations of financial strength, point to its vulnerability (and systematic riskiness) in pleading for a lower fine. Surely, the US regulators are not so reckless as to risk triggering a global financial crisis by levying an unmanageable fine, are they? I wouldn’t be surprised if Deutsche Bank’s executives are furiously thumbing through Treasury’s War in the hope of divining an answer to that question.
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http://www.telegraph.co.uk/business/2016/10/05/deutsche-is-latest-victim-of-americas-treasury-war/
 
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Milagro said:
This has the potential to cause another financial crisis on the scale of the Lehmann Brothers yet all you fools can talk about is the "pussy tape", truly sad bastards!!
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And you're not talking about it?

LOL.

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Seahawk said:
And you're not talking about it?

LOL.

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Yes I am but as entertainment mostly, however this has the potential to cause another 2008. Wouldn't it be supremely ironic if the vindictive Obama admin and the Treasury caused a new financial crisis by imposing a punitive fine which causes Deutsche bank to crash. This conjures up the image of a man sitting on a tree bough whilst cutting it with a saw!

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https://en.wikipedia.org/wiki/Too_big_to_fail#Commentary



The "too big to fail" theory asserts that certain corporations, and particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system, and that they therefore must be supported by government when they face potential failure.[1] The colloquial term "too big to fail" was popularized by U.S. Congressman Stewart McKinney in a 1984 Congressional hearing, discussing the Federal Deposit Insurance Corporation's intervention with Continental Illinois.[2] The term had previously been used occasionally in the press.[3]
Proponents of this theory believe that some institutions are so important that they should become recipients of beneficial financial and economic policies from governments or central banks.[4] Some economists such as Paul Krugman hold that economies of scale in banks and in other businesses are worth preserving, so long as they are well regulated in proportion to their economic clout, and therefore that "too big to fail" status can be acceptable. The global economic system must also deal with sovereign states being too big to fail.[5][6][7][8]
Opponents believe that one of the problems that arises is moral hazard whereby a company that benefits from these protective policies will seek to profit by it, deliberately taking positions (see asset allocation) that are high-risk high-return, as they are able to leverage these risks based on the policy preference they receive.[9] The term has emerged as prominent in public discourse since the 2007–08 global financial crisis.[10] Critics see the policy as counterproductive and that large banks or other institutions should be left to fail if their risk management is not effective.[11][12] Some critics, such as Alan Greenspan, believe that such large organisations should be deliberately broken up: "If they're too big to fail, they're too big".[13] More than fifty prominent economists, financial experts, bankers, finance industry groups, and banks themselves have called for breaking up large banks into smaller institutions.[14]
 
now you fucks have to face too big to fail is real



so now you asslickers say they are tooo big to pay for their scams
 
Desh, can you share with us in your own words what you think Dodd-Frank has accomplished vis-a-vis "too big to fail"?
 
#14

Excellent!
And a bonus question: how Dodd Frank compares to Glass Stiegel.

Regarding Germany:
I can't predict how Chancellor Merkel's successors will act.
But I believe Angela Merkel has demonstrated an intention to benefit Germany without being a detriment to the region.

The number of refugees she's allowed in has alarmed some outsiders, as well as some native Germans.

BUT !!

Merkel understands Germany has a history to live down. I think she's doing an impressive job of it.
 
the fine looks WAY excessive, if the bank is reforming it's practices -which it appears it's doing

Deutsche Bank has been struggling to overhaul its business model that is built around trading activities that have become much less lucrative under new regulation enacted since the 2008-2009 financial crisis. "Here is a financial institution which needs to be restructured and strengthened and needs to bring in new capital and we cannot then have an even bigger amount of capital being pulled out by the American authorities. That is really counter-productive to put it mildly," Dijsselbloem said.
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cawacko said:
Desh, can you share with us in your own words what you think Dodd-Frank has accomplished vis-a-vis "too big to fail"?
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From the Telegraph article.

After 9/11 the US government was fighting a war against terror, after all. But officials began to realise that these same techniques could be used to more prosaic ends – like, for example, forcing foreign banks around the world to reveal which of their clients were American citizens with more than $50,000 in investments (under the Foreign Account Tax Compliance Act) and to control the behaviour of the banks themselves.

Bully-boy tactics or condign punishment? Last year, the US Department of Justice fined General Motors $900m for hiding an ignition switch defect that resulted in at least 174 deaths. Now it proposes to fine Deutsche Bank $14bn for mis-selling mortgage-backed bonds. It doesn't take a moral philosopher to see that something is out of whack here.

We do not know for sure that the $14bn figure was leaked by a US enforcement agency. However, the journalist with the lead byline on the scoop about the fine covers enforcement out of the Wall Street Journal’s Washington bureau and it is pretty hard to see what Deutsche would gain from the leak. It is, however, easy to see what it has to lose – the German bank’s share price fell by a third after the story broke (although it has climbed back a little in the past couple of days).
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Still the relentless Pussygate feeding frenzy continues, meanwhile the asylum is burning down because the staff gave the inmates some matches to play with.

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Meanwhile more Pussygate, whilst Russia is moving nuclear capable missiles into Kaliningrad next door to Poland. Have you read one damn thing about that on here? Of course not, it is all about the bass no treble!!
 
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"Russia is moving nuclear capable missiles into Kaliningrad next door to Poland. Have you read one damn thing about that on here? Of course not, it is all about the bass no treble!!" #19
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I agree it's noteworthy.

BUT !!

a) This is the first I've heard of it. I didn't raise the issue because I couldn't, because I didn't know.

b) Do you know some detail that renders this a significantly increased threat to U.S. and or NATO security? The U.S. still has our nuclear triad. Russia can move missiles where ever it wants. We can still have them glowing in the dark in an hour.
I read that one U.S. Minuteman missile has more explosive power than all the munitions used in WWII by all sides; Allies, Axis, Soviets, Italy, Germany, the U.S., including the nukes dropped on Japan.
That's ONE Minuteman missile.

If Putin picks a fight with U.S. it may be the last mistake he makes.
 
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