Deutsche Bank

American Nightmare

Traders walk by the post where Deutsche Bank is traded on the floor of the New York Stock Exchange, Monday, Sept. 26, 2016. Shares in Deutsche Bank are down sharply after a report that the German government won't intervene with U.S. officials who are pressing the bank to pay $14 billion to settle an investigation into its sales of mortgage-backed securities. (AP Photo/Richard Drew)
Deutsche Bank, once a high-flyer on Wall Street, has taken a serious beating of late.
  • Why it matters

    Why it matters

    Deutsche Bank’s precarious financial situation is mightily exacerbated by a multi-billion demand from U.S. authorities. The possible global economic and political fallout is immense.

  • Facts

    Facts

    • On September 30, Deutsche Bank’s share price fell for the first time below the €10 mark.
    • U.S. Justice Department reportedly is demanding $14 billion the selling of mortgage-backed securities ahead of the 2008 financial crisis. The figure represents 90 percent of the bank’s market value.
    • Deutsche Bank, once among the world’s top five investment banks, is now mulling a partial pullout of the United States to help pay for its legal costs.
  • Audio

    Audio

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John Cryan was already known to have just about the worst job of any chief executive. The Brit has been in charge of Deutsche Bank since July 2015, and the value of his bank’s stocks has plummeted by more than 50 percent since. Questions are being raised louder than ever about what Deutsche Bank wants to be and why it’s still needed at all, and the answers seem to be convincing investors less than ever before.

And on the evening of September 29, the worst job in business turned into a veritable nightmare.

The panic selling of Deutsche Bank shares began in the United States, after it was reported that several hedge-fund clients had pulled their money. Even some normal private customers in Germany became nervous and took money out of their accounts. Shareholders of the bank were likewise alarmed and began selling stock.

September 30 was even more of a roller-coaster. In the morning, the bank’s share price fell for the first time below the magic €10 mark, prompting speculation about whether the country’s top bank might need its first-ever government bailout. Shortly after, a new rumor pushed the stock price up again, but by then Mr. Cryan and Co. had already gone through several near-death experiences.

Deutsche Bank was now seriously being mentioned in the same breath with Lehman Brothers – the U.S. investment bank that declared bankruptcy on September 15, 2008, prompting a massive financial crisis and bank bailouts across the globe.

So what got us to this point?

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