Deutsche Bank Exodus Continues As Real Estate Chief Leaves For Blackstone

Have you ever wondered which big bank after Lehman Brothers would be next to fall? This is why you see so much shuffling from within and people resigning suddenly and going to work for another institution.

Moreover, with over $72 TRILLIONyes trillion, in derivatives exposure — we have likely found it. To put this tiny bit of risk in perspective, the GDP of Germany itself is a mere humble $2.7 trillion.

This is why Germany is also worried in this high stakes game of chicken. If Greece goes, Deutsche Bank who’s heavily invested will go, and creates the possibility of bringing the country with it. From there you can only see how such a scenario would spread to the rest of the world.

 

Earlier this month, Deutsche Bank’s co-CEOs Anshu Jain and Jürgen Fitschen were shown the door (well, technically they resigned, but with shareholder support plummeting amid skepticism about both financial targets and ongoing legal problems, it’s easy to read between the lines). The bank, which has paid out more than $9 billion over the past three years alone to settle legacy litigation, has become something of a poster child for corrupt corporate culture. Consider the following rundown of the legal problems the bank faced as of the beginning of its 2015 fiscal year:

We are currently the subject of regulatory and criminal industry-wide investigations relating to interbank offered rates, as well as civil actions. Due to a number of uncertainties, including those related to the high profile of the matters and other banks’ settlement negotiations, the eventual outcome of these matters is unpredictable, and may materially and adversely affect our results of operations, financial condition and reputation.  Continue reading

Swiss Franc ‘Nuclear Explosion’ Spreading, Credit Suisse, Saxo Hurt

Credit Suisse Group AG (CSGN) and Saxo Bank A/S joined an increasing number of European financial companies warning that the Swiss central bank’s surprise decision to abolish its currency ceiling may dent earnings.

Credit Suisse, Switzerland’s second-biggest bank, indicated Monday that currency swings may hurt profit. Denmark’s Saxo Bank said some clients might not be able to settle unsecured amounts, which might cause undisclosed losses.

The full force of the decision won’t be known for months and is “closer to a nuclear explosion than a 1,000-kilogram conventional bomb,” Javier Paz, senior analyst in wealth management at Aite Group, said in an e-mail Tuesday. “The aftermath is like a black hole that can suck massive amounts of credit from currency trading as we have known it.” Continue reading

Bank Losses From Swiss Currency Surprise Seen Mounting

Among those taking a hit: Everest Capital, who lost its main fund.

 

The $400 million of cumulative losses that Citigroup Inc. (C), Deutsche Bank AG and Barclays Plc (BARC) are said to have suffered from the Swiss central bank’s decision to end the cap on the franc may be followed by others in coming days.

“The losses will be in the billions — they are still being tallied,” said Mark T. Williams, an executive-in-residence at Boston University specializing in risk management. “They will range from large banks, brokers, hedge funds, mutual funds to currency speculators. There will be ripple effects throughout the financial system.” Continue reading