German Deutsche Bank faced threat of bankruptcy
Three years ago, there were reports about bankruptcy of Deutsche Bank, which is managing SOFAZ assets. This is caused by too much unsecured derivatives in the balance of the bank. Now, International Bank of Azerbaijan has started to speak about this. We’ll explain this soon.
In 2013, it was known that Deutsche Bank’s derivatives made €55.6 trillion or $72.8 trillion which is a record. At that time, many experts surprised that why the US bank has not hit record. US JP Morgan bank ranked at 2nd at that time.
IMF officials say the largest bank of Germany is one of biggest risks for global financial system. By the way, result of stress-tests conducted by the US Fed in Deutsche Bank is satisfactory for the second time. The bank’s shares fell to its record two days ago.
German largest banks and insurance companies operate interdependently. Allianz, Munich Re, Hannover Re, Deutsche Bank, Commerzbank and Aareal operate more interdependently. As you understand, any poor ring of this chain will lead to collapse of others as “domino effect”.
For interest to note that HSBC and Credit Suisse banks of Deutsche Bank create risks for global financial system.
In turn, Commerzbank is not risky for the global financial system and remains as therzbank just gets these risks from US and European banks.
IMF says commotions in German banking sector have risks for foreign markets rather than domestic. In other word, if Deutsche Bank collapses, thi main player of domestic market. Actually, Commes will lead to domino effect.
IMF officials say Germany is to absolutely find the way out. Bank’s assets must be reassessed. Moreover, the government should stiffen the control over the bank and impose moratorium if it is needed. According to German press, the government has already started to take certain steps in this direction. However, IMF means some days while this will take much time. In any case, the government says the situation is under control.
Deutsche Bank Advisors manages over $100 mln of SOFAZ assets. According to outcomes of 2015 December, 7.1% of investment portfolio is managed by foreign investors.
As of December 31, 2015, AZN 3,708,059 ($2,377,875) of the Fund was managed by financial organizations in accordance with the asset management agreements. Fund’s foreign managers were Deutsche Bank AG, EBRD, State Street Global Advisors and UBS.
Source: APA
