The banking crisis in Europe: Deutsche Bank is just the tip of the iceberg
The banking crisis in Europe is gaining momentum. And although the facts of this destructive process are hidden, more and more moments become visible to others. This was particularly vividly illustrated by the example of Deutsche Bank, which received several blows from different sides at once.
However, it is only the tip of the iceberg, visible to the whole problem, while almost every bank in Europe is in a risky situation.
Can Deutsche Bank suffer the fate of Lehman Brothers?
European Economic Front
8 years ago, the economic crisis began in the United States. This time it can happen in Europe. And even if the Old Woman does not become an initiator, the economic wave will easily demolish what now stands on rickety supports.
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The fact is that Europe is experiencing a full range of economic ailments and, like any painful elderly lady, striving to hide her problems under a thin or thick layer of powder. Such a powder for the EU is the ECB’s test of the reliability of banks, which, for some unknown reason, were easily passed; assurances that quantitative easing and negative interest rates will work to improve; shifting responsibility from one economy to another.
Officially, the ECB confirmed that all banks in Europe are normal, that the situation is under control. However, other information appeared in parallel. For example, in the US, Deutsche Bank is recognized as dangerous and has not passed the stress test from the Federal Reserve. He was also recognized as the most dangerous bank in the world, which will potentially cause enormous damage not only to Germany, but also to Europe, and to the whole world, in the event of its collapse.
This happened! 500 Euro bills will no longer print!
It is difficult to talk about quantitative easing at all: we are assured that free money running into the banking system from the air will save the situation. For some reason, this approach did not save Japan, and it continues to plunge rapidly into the abyss of crisis. Even the United States decided to postpone their quantitative easing, after years of ineffective infusion.
Negative interest rates are generally a song. The ECB, and then other banks directly stated: we do not need wealth! We are for poverty! In other words, to describe the situation does not work. It is clear that the official idea – to stimulate lending and production. However, in fact, people who do not have savings will not buy anything – no matter what.
But no, keeping money in a bank – safe, familiar, convenient – is now unprofitable. With each passing day, the amount added does not increase, as before, but decreases. Of course, for the time being there are banks that offer a positive interest rate, but even there, the rates are ridiculous 0.1-1%, which can not cope even with inflation. Not to mention the profitability.
What does not prevent the richest people from transferring their assets to cash in their accounts – the credibility of many other classic assets has also decreased.
Transferring responsibility from one country to another is generally laughter and sin. Italian Prime Minister Matteo Renzi responded to his European counterparts on charges that Italy is the weakest link in the banking system of the entire European Union. The man did not lose his head and said that the most dangerous is the same Deutsche Bank. The reason is that it is this bank that has the largest stock of toxic assets, the so-called derivative financial instruments (PFI). They became the initiator of the past crisis.
And their volume in the global economy is only growing.
And the problem of Italian bad debts, in comparison with this time bomb, is nothing.
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Of course, the politician is cunning – the problem in Italy, as in Greece or Cyprus, is capital and very dangerous. Just against the background of an atomic bomb flying on its head, it is somehow difficult to take seriously deadly diseases like AIDS or the plague – they at least give time for reflection or a chance for healing, like bad debts. But the “explosion” of toxic derivatives, according to the experience of the world economy, occurs almost instantly.
The banking crisis in Europe on the example of Deutsche Bank
deutsche-bank The example of Deutsche Bank is indicative – it is one of the largest banks in Europe and the world. And he is the flagship in many ways. His health is also an example of average health among European (and even the world, to be honest) banks.
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You should not assume that all claims made to Deutsche Bank apply only to it. Similar problems are gathering over the entire industry, which scares both the bankers themselves and us, the consumers of services. But it is immediately clear how and what they really earn and how they play (hard and at extremes) competitors in this niche.