Deutsche Bank (DE:DBKGn) has been the main topic of discussion across the financial world this week. Focus is on the €10.5million fine issued by the Department of Justice (DoJ) for selling mortgage-backed securities in the United States. The size of the fine has rattled other banks in the European Union, whom the DoJ will investigate and target next.
The banking sector is currently facing major problems of their own, with record low interest rates, sluggish growth throughout the major economies, and tougher banking regulations give additional challenges to Deutsche bank. Investor confidence has plummeted sending its share price to record lows of €10.15.
Many questions arises to whether Deutsche Bank can afford to pay the fine, hence prompting reports that they may require a state bailout- similar to the situation of how Lehman Brothers collapsed in 2008, sparking a global recession. However recent reports say that the German government is not planning to save the ailing bank, but will monitor the situation more closely. Leaving investors uncertain about the banks future. Deutsche bank executive John Cryan has made it clear that a state bailout was “out of the question”. Right now Deutsch bank is walking on a very thin line.
Stay tuned for updated analysis on the Deutsche Bank situation.