Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsDeutsche Bank May Have $18 Billion Italy, Spain Gap
(Bloomberg) Deutsche Bank AG (DBK) has a funding gap of as much as 14 billion euros ($17.5 billion) at its Italian and Spanish units which could reduce capital levels at the firm if those countries leave the euro, according to analysts at Espirito Santo Investment Bank.
Deutsche Banks loans amount to 205 percent of deposits at the Italian unit and 314 percent in Spain, according to London- based analyst Andrew Lim, who cited company filings. If those countries exit the euro and the new currencies fall 30 percent, the Frankfurt-based lender could lose as much as 4.2 billion euros of equity as the value of assets at those divisions declines while some funding remains in euros, he said.
The impact would be quite significant for a bank which is already very weakly capitalized, Lim wrote in a note today, reiterating his sell recommendation on shares in Germanys biggest bank. The effect of those two states leaving the euro could be mitigated by the wholesale funding of the units, which would also be devalued in the case of a breakup of the common currency, the analyst said.
The prospect of a Greek exit from the single currency has cast doubt on the euros survival and prompted concern about banks cross-border assets and liabilities, which might be re- denominated into legacy currencies in the event of a break-up. If a banks loans and securities transformed into a depreciating lira or peseta, while its borrowings remained in euros, the lender would have to absorb losses. ..................(more)
The complete piece is at: http://www.bloomberg.com/news/2012-06-13/deutsche-bank-may-have-14-billion-euro-italy-spain-funding-gap.html
InfoView thread info, including edit history
TrashPut this thread in your Trash Can (My DU » Trash Can)
BookmarkAdd this thread to your Bookmarks (My DU » Bookmarks)
5 replies, 1265 views
ShareGet links to this post and/or share on social media
AlertAlert this post for a rule violation
PowersThere are no powers you can use on this post
EditCannot edit other people's posts
ReplyReply to this post
EditCannot edit other people's posts
Rec (1)
ReplyReply to this post
5 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
Deutsche Bank May Have $18 Billion Italy, Spain Gap (Original Post)
marmar
Jun 2012
OP
YellowRubberDuckie
(19,736 posts)1. Surprise, Surprise.
More fraud. Capitalism is just working gangbusters globally, huh? Anyone else ready for Star Trek Utopia where there isn't any need for money? I'm so sick of this mess.
banned from Kos
(4,017 posts)3. How is this fraud?
Are you saying that Italy and Spain are cheating DB out of a billion by leaving the euro someday?
YellowRubberDuckie
(19,736 posts)4. I don't know.
I'm sure there's some in there someplace. There always is...
banned from Kos
(4,017 posts)2. DB has a small valuation of $32 billion
No way Germany lets DB suffer through big write-downs.
CJCRANE
(18,184 posts)5. The problem with the Eurozone is that there's no strong federal government.
The Eurozone as a whole can afford to bailout the banks but there's no one in charge to force it through.