August 2016 – GERMANY – For the fourth consecutive Sunday, Germany’s leading financial newspaper Frankfurter Allgemeine Zeitung has run an analysis of the perilous and declining state of its largest bank, Deutsche Bank. This Sunday, the FAZ interviewed a very prominent German economist who says, “Nationalize Deutsche Bank on an emergency basis! It is in worse crisis than in 2008” in the global bank panic. That Martin Hellwig of the Max Planck Institute in Bonn would make this call—in a country where nationalizations were never discussed even at the depth of the 2007-09 panic and collapse—indicates that Deutsche Bank is nearing a real implosion unless it is “saved.” And the IMF has already formally found it to be the one giant bank which “radiates more risk” to other banks and banking systems, than any other in the world.
Its implosion will signal a general economic crash, which will exacerbate the confrontations being pushed by the Obama Administration and NATO against Russia and China. Schiller Institute founder and Germany’s BueSo party chairwoman Helga Zepp-LaRouche only weeks ago issued a public call to “Deutsche Bank Must Be Rescued for the Sake of World Peace.” She and Lyndon LaRouche said the bank’s investment policies must be completely redirected in the process to industrial and infrastructure development, the policies of its CEO Alfred Herrhausen, who was assassinated on Nov. 30, 1989. Hellwig declares to FAZ that “investment banks have sucked out Deutsche Bank” for more than a decade, so that its terminal crisis does not even stem from the 2008 global panic.
It must be nationalized, Hellwig says, because any attempt to “wind it down” — i.e., to “resolve” the megabank by bailing in bondholders, etc.—would radiate that risk out to the whole banking system. The same thing, he notes, is true of France’s BNP Paribas. When asked if Deutsche Bank has an internal plan to avert implosion, Hellwig says the bank’s plans are insider trading, speculation, mergers and acquisitions, etc. Finally, asked whether he himself could step in and run a nationalized Deutsche Bank, Hellwig demurs that he is not fit for the job because he takes time to think through decisions and for Deutsche Bank, there is no time. Zepp-LaRouche stressed how rare any proposal for nationalization is in Germany, and that it signals that, in fact, there is no time; her proposal to save the megabank but to make it effectively a development bank, must be carried out. “This system is doomed. Don’t kid yourself and don’t become complacent; it could blow out at any moment,” she said. –EIR
Capital shortfall: Deutsche Bank had the highest potential capital shortfall, 19 billion euros ($21 billion), in a study of 51 European banks using U.S. Federal Reserve stress test methods, German economic research institute ZEW said. “European banks lack sufficient capital to offset the losses expected in the case of another financial crisis,” the ZEW said in a statement on Tuesday. –Reuters
Riskiest financial intuition in the world, warns IMF: For nearly 150 years, the Deutsche Bank in Germany has been trusted throughout Europe. However, in recent months, the bank has instead become the riskiest financial institution in the world, according to the International Monetary Fund. Deutsche Bank AG’s share prices have decreased dramatically this year, dropping over 50%. In fact, the institution has been experiencing a steady downturn for quite a while, having dropped in value by 90% since its peak in 2007. But the IMF’s main worry is that Deutsche Bank is over-leveraged. –Value Walk
Worst than Lehmans: Deutche Bank is under major duress and could be the first major bank to collapse in the next stage of the banking crisis, informed The Doc that unlike the collapse of Lehman Brothers in 2008 which the Western Central banks were able to contain thanks to $13 T in bailout funds, a failure of Deutsche Bank would trigger a systemic banking contagion the likes of which the Western world has never seen. If Deutsche Bank goes down, it will be Lehman TIMES FIVE. –Silver Doctors