If you’ve been reading here long enough, this shouldn’t come as a shock, especially after knowing that Deutsche Bank is exposed to over $72 trillion in derivatives exposure. To put this in perspective, and as the article states, Germany’s humble GDP currently sits at only $3.4 billion. For further perspective, the $3.4 billion GDP is 0.00004722222% of the $72 trillion in exposure.
Either way, you don’t have to be a financial expert to see Germany has a slight problem on its hands. Litigation charges are likely the least of its worries. The United States economic woes (i.e. debt) might be a seriously problem, but Germany’s are astronomical when considering such things as the debt-to-GDP ratio. It wouldn’t be surprising at all to see Germany collapse and become the falling dominoes catalyst that leads the world economy into a global depression.
The global collapse is a sure bet and is a matter of when, not if. It’s almost a sure bet that Germany will lead the way. The United States is more of an expert in the game of kicking the can down the road.
GERMANY could force the European Union into ruin after Deutsche Bank’s share price plunged following the country’s biggest lender’s first annual loss since the financial crisis.
The German lender posted a full year loss of £5.1 billion (€6.8bn) on Thursday – higher than the expected €6.7bn million.
With losses of €2.1bn in the fourth quarter of 2015-16, fears of the entire eurozone toppling are becoming an increasing reality.
Much of Deutsche’s losses have been down to litigation charges, racking up €1.2bn in the last quarter – which could still increase.
This year’s litigation charges have reached €5.2bn, compared with €2bn the year before.
A reduction in the bank’s corporate banking and securities division has been blamed on revenues in the fourth quarter falling 15 per cent year on year to €6.6bn.
Mark to market losses in Deutsche’s non-core operating unit were also blamed.
Deutsche’s fall in grace adds to Germany’s seemingly never-ending woes this year, with the country’s industrial production growth slipping to zero per cent last week and customer confidence plummeting.
As the biggest economy in the eurozone, with a GDP of $3.4bn, experts have warned if its economy – along with second biggest eurozone economy France – crashes it would trigger a domino effect which would bring the entire currency crashing down causing a detrimental ripple effect on the global economy.
Last week, under pressure German chancellor Angela Merkel admitted Germany may fail to balance its books this year as it contends with the costs of letting in more than a million refugees in a bid to relieve the current crisis across Europe.
In a bid to patch up some of Deutsche Bank’s central issues, the lender is restructuring.
At the beginning of the week it revealed bonuses could be slashed by as much as 30 per cent for staff, including investment bankers.
And it warned up to 1,000 jobs in London could be at risk if it scaled back its investment banking sector.
Full article: End of the eurozone? Germany’s biggest lender Deutsche Bank CRASHES with first annual loss (Express)