Deutsche Bank

FTSE 100 also falls amid fears another bank could slip into trouble after UBS takeover of Credit Suisse.

It’s does the market have confidence in our liquidity?” “I can’t see it – yet,” they said, adding that the “worry of contagion may become contagion itself”. They helped to drag the FTSE 100 down by 1.6%. If this spikes upward it can be an indication that investors believe that the entity behind the CDS is more likely to default on its debts. Shares in the German bank fell as much as 14% before recovering some ground to end Friday down 8.6%. Europe’s Stoxx 600 banks index fell 4%, and the UK’s banking index fell more than 3%.

Banking stocks fell sharply in Europe today with heavyweights Deutsche Bank and UBS Group pummelled by worries that the worst problems in the sector since ...

The rescue of Credit Suisse has also ignited broader worries about investors' exposure to a fragile banking sector. Shares of major US banks JPMorgan Chase & Co, Wells Fargo and Bank of America edged about 0.4% lower in premarket trade today. "I think it had very profound implications for the regulation of banks, and for the way that banks manage themselves," Winters said. The investor pain was spread across the banking sector, with the index of top European banks falling 4.6% and British banks losing 4%, down for a third session in a row. Swiss authorities and UBS are racing to close the takeover within as little as a month, according to two sources with knowledge of the plans. "Deutsche Bank has been in the spotlight for a while now, in a similar way to how Credit Suisse had been," said Stuart Cole, head macro economist at Equiti Capital.

German giant Deutsche Bank fell for a third day, sinking more than 8 per cent.

The takeover of Credit Suisse has also ignited broader concerns about investors' exposure to a fragile banking sector. US authorities had invoked "systemic risk exceptions" after the failures of SVB and Signature Bank that allowed them to protect uninsured deposits, including those of wealthy technology executives and cryptocurrency investors. "I think it had very profound implications for the regulation of banks, and for the way that banks manage themselves," Winters said. As part of the deal, the Swiss regulator determined that Credit Suisse's AT1 bonds with a notional value of $17 billion would be wiped out, a decision that stunned global credit markets. Swiss authorities and UBS are racing to close the takeover within as little as a month, according to two sources with knowledge of the plans, to try to retain Credit Suisse's clients and employees. For the fourth time in a week, US Treasury secretary Janet Yellen spoke aiming to reassure Americans that the US banking system is safe.

Steep drops in bank shares undermine hopes among authorities that the rescue of Credit Suisse last weekend would stabilise the broader sector.

It was the worst performer in an index of European bank stocks, which fell as much as 5.7%. The widespread declines undermine hopes among authorities that the rescue of Credit Suisse last weekend would stabilise the broader sector. The bank, which has staged a recovery in recent years after a series of crises, said on Friday it would redeem a tier-two subordinated bond early.

Central banks and regulators had hoped that the Credit Suisse rescue deal would help calm investor jitters about the stability of Europe's banks.

and Europe, it is just how far regulators will always go to ensure depositors are protected," the note said. [underwent a multibillion-euro restructure](https://www.cnbc.com/2019/07/05/deutsche-bank-eyes-huge-multi-billion-euro-restructuring-drive.html) in recent years aimed at reducing costs and improving profitability. Credit Suisse's collapse boiled down to a combination of three causes, according to JPMorgan. relative value)," Autonomous strategists Stuart Graham and Leona Li said in a research note. These figures would not indicate that there is any cause for concern about the bank's solvency or liquidity position. Federal Reserve](https://www.cnbc.com/federal-reserve/) on Wednesday. JPMorgan was unable to determine whether the unprecedented depositor outflows suffered by the Swiss bank had been amassed by themselves in light of SVB's failure, or had been driven by a fear of those outflows and "lack of conviction in management's assurances." These were a "string of governance failures that had eroded confidence in management's abilities," a challenging market backdrop that hampered the bank's restructuring plan, and the market's "fresh and intense focus on liquidity risk" in the wake of the SVB collapse. At the time of SVB's collapse, Credit Suisse was already in the spotlight over its liquidity position and had suffered massive outflows in the fourth quarter of 2022 that had yet to reverse. The lender [recorded annual net income of 5 billion euros ($5.4 billion) in 2022](https://www.cnbc.com/2023/02/02/deutsche-bank-smashes-profit-expectations-in-fourth-quarter-as-higher-interest-rates-bolster-revenue.html), up 159% from the previous year. [emergency rescue](https://www.cnbc.com/2023/03/20/what-ubs-rescue-of-credit-suisse-cs-means-for-markets-and-banks.html) of [Credit Suisse](https://www.cnbc.com/quotes/CSG.N-CH/) by [UBS](https://www.cnbc.com/quotes/0R3T-GB/), in the wake of the collapse of [U.S.-based Silicon Valley Bank](https://www.cnbc.com/2023/03/13/hsbc-buys-silicon-valley-bank-uk-protecting-deposits-.html), has triggered contagion concern among investors, which was deepened by further monetary policy tightening from the [U.S. [wipe out 16 billion Swiss francs ($17.4 billion) of Credit Suisse's additional tier-one (AT1) bonds,](https://www.cnbc.com/2023/03/21/credit-suisse-bondholders-prepare-lawsuit-after-at1-bond-writedown-in-ubs-deal.html) left the market unconvinced that the deal would be sufficient to contain the stresses in the sector.

Europe's banking stocks tumbled Friday as investors acted on their lingering worries that the recent crises at some banks could spill over into the wider ...

The bond would have gradually lost its eligibility as a form of regulatory capital according to rules brought in after the 2008 financial crisis, the source said. Some analysts said investors had been rattled by Deutsche Bank’s announcement Friday that it would pay back one of its bonds five years before its maturity date. The cost of insuring against a possible default by Deutsche Bank on its debt has soared in recent days. [(DB)](https://money.cnn.com/quote/quote.html?symb=DB&source=story_quote_link), plunged as much as 14.5% before paring its losses to close 8.5% lower. Deutsche’s five-year credit default swaps (CDS) skyrocketed to 203 basis points Thursday, according to data from S&P Market Intelligence. The index is down 18% from its high in late February. [emergency takeover](https://edition.cnn.com/2023/03/20/investing/credit-suisse-at1-bond-write-down-explainer/index.html) brokered by the Swiss government. [hike interest rates](https://edition.cnn.com/2023/03/16/economy/european-central-bank-interest-rates/index.html) by half a percentage point, judging that inflation posed a bigger threat to the economy than recent turmoil in the banking sector. Shares in UBS [(UBS)](https://money.cnn.com/quote/quote.html?symb=UBS&source=story_quote_link) and Credit Suisse [(CS)](https://money.cnn.com/quote/quote.html?symb=CS&source=story_quote_link) were 3.6% and 5.2% down respectively. But — after two bank collapses in the United States and an emergency takeover of Credit Suisse this month — some investors may have interpreted the announcement as a sign that Deutsche Bank is nervous about the state of the banking sector and trying to overcompensate, Jonas Goltermann, deputy chief markets economist at Capital Economics, told CNN. [surprise spike in inflation](https://edition.cnn.com/2023/03/23/economy/uk-interest-rates-hike/index.html) last month. [crises at some banks ](https://edition.cnn.com/2023/03/15/economy/european-bank-rules-svb/index.html)could spill over into the wider sector.

German lender's shares were hit by general loss of confidence, not by any specific failings.

None of which, though, explains why – other than its recently chequered record – Deutsche found itself in the spotlight. [At its worst point, Deutsche was down 14%](https://www.theguardian.com/business/2023/mar/24/european-bank-shares-fall-as-market-jitters-return-deutsche-bank-ubs-ftse-100). The ECB, the US Federal Reserve and the Bank of England raised interest rates this week. At Deutsche, the only minor news from Frankfurt was a decision to buy back a small slice of its debt, which regulators would not have permitted if they were worried about liquidity. Nor, as far as we know, is the European Central Bank in a flap about Deutsche in the way that Swiss authorities were when they advanced a 50bn Swiss franc borrowing facility to Credit Suisse in the days before There is no evidence of a flight of depositors at Deutsche, the factor that really sealed Credit Suisse’s fate.

Shares of Germany's largest bank Deutsche Bank slid on Friday as investors fretted that regulators and central banks have yet to contain the worst shock to ...

The index of top European bank shares [(.SX7P)](https://www.reuters.com/quote/.SX7P) ended down 3.8%. A spokesperson for UniCredit declined to comment. [(JPM.N)](https://www.reuters.com/companies/JPM.N) ended down 1.5%, while Bank of America [(BAC.N)](https://www.reuters.com/companies/BAC.N) climbed 0.6%. "It takes time. The meeting was chaired by U.S. regulators - agreed at a Friday meeting that the U.S. Treasury said the Financial Stability Oversight Council - which comprises the heads of various U.S. In the latest effort to reassure investors, the U.S. [(CRDI.MI)](https://www.reuters.com/companies/CRDI.MI) is leaning towards [repaying a perpetual bond](/markets/rates-bonds/unicredit-leaning-towards-repaying-at1-bond-june-source-2023-03-24/) at the earliest opportunity in June, a source close to the matter told Reuters. [(.SPLRCBNKS)](https://www.reuters.com/quote/.SPLRCBNKS) recovered 1.75%, with PacWest Bancorp rallying more than 3% and First Republic Bank [(FRC.N)](https://www.reuters.com/companies/FRC.N) falling 1.4%. [(DBKGn.DE)](https://www.reuters.com/companies/DBKGn.DE) was thrust into the investor spotlight and [slumped](/markets/deutsche-bank-shares-whipsaw-after-cds-blow-out-2023-03-24/) 8.5% alongside a sharp jump in the cost of [insuring](/markets/deutsche-bank-shares-whipsaw-after-cds-blow-out-2023-03-24/) its bonds against the risk of default. [(SBNY.O)](https://www.reuters.com/companies/SBNY.O) earlier this month.

European bank stocks took a heavy hit on Friday, with Deutsche Bank falling as much as 14 per cent, as efforts by policymakers to reassure investors over ...

- Copyright The Financial Times Limited . . Last week the European Central Bank raised rates by 0.5 percentage points. Citigroup strategist Dirk Willer said it was “too early to tell” whether banking sector stress had grown large enough to meaningfully impact the US business cycle. Late on Thursday, US treasury secretary Janet Yellen said regulators were “prepared to take additional actions if warranted” to ensure the safety of bank deposits. [ Germany’s Commerzbank fell 8.5 per cent, while France’s Société Générale lost 7.4 per cent and Finland’s Nordea shed 8.1 per cent. and there are bank specific issues to worry about like regulation and deposit safety.”

How serious are the difficulties facing the German lender? | Finance & economics.

Yet the main reason for the sell-off is not a dreaded skeleton in Deutsche Bank’s closet. The market for Deutsche Bank’s credit-default swaps is illiquid, meaning a few trades can move prices fast. Deutsche Bank’s net profits of €5.7bn ($6.1bn) in 2022 were double those of the year before. And at1s count for a higher share of Deutsche Bank’s risk-weighted assets than at other banks. Deutsche Bank may have a large book of derivatives, which are dangerous instruments in volatile markets, but these are traded openly and often enough to make it unlikely they are severely mispriced. By contrast, after a prolonged and painful restructuring, Deutsche Bank is profitable.