Top German Firms Said Ready to Provide Capital for Deutsche Bank

  • Top German Firms Said Ready to Provide Capital for Deutsche Bank

Top German Firms Said Ready to Provide Capital for Deutsche Bank

The German government has denied speculation that it is planning a rescue for the bank, but there are reports that it is holding talks with United States authorities to help Deutsche Bank reach a settlement.

As prospects for growth in low income countries become more challenging, the International Monetary Fund (IMF), has introduced zero interest rates on all its concessional facilities until 2018.

The bank said in a statement that the fresh round of cuts, on top of 3,000 announced in June, would affect mainly its chief operating office in Frankfurt, with asset management, macroeconomic research, global markets, and corporate finance all hit, along with human resources, communications, and corporate social responsibility.

"Deutsche Bank, like many other banks, has to look at its business model", she told Bloomberg Television during the International Monetary Fund and World Bank's autumn meetings in Washington.

The shaky bank has been teetering since the US Department of Justice in September demanded some $14bn (£10.8bn) to settle claims that Deutsche mis-sold US mortgage-backed securities in the lead-up to the 2008 global financial crisis.

"Remaining profitable in an environment marked by lower growth, lower interest rates, and tighter regulation will also require a significant transition in business models, because many existing balance sheets and business practices are not now structured in a way that can earn a sustainable return".

CFO Innovation spoke to two academics and their take on Deutsche Bank should provide a bit of comfort. "So the sooner the better", Lagarde said in an interview on Bloomberg Radio.

"But a settlement would certainly be welcome because it would deliver some certainty as to what weight the bank will have to carry and whether it matches with its provisions or not".

"Deutsche Bank, like many other banks, has to look at its business model, which I'm sure it does because it's in the process of selling assets here and there", she said.

According to reliable sources, investigators at BaFin were not able to find evidence that the multinational bank aided clients in breaching Russia's financial sanctions during its military tussle with Ukraine back in 2014.

Bafin declined to comment on its investigation.

"If you win the argument that a trade agreement grows the economy, you're most of the way there", he said at the Peterson Institute for International Economics.

Ratings agency Moody's said that it does not expect Deutsche to accept an excessive penalty for the US mortgages case that might prevent it from making interest payments on "AT1" debt which forms part of its capital reserves.

Deutsche Bank's stock is down around 8 percent since the news emerged last month, shrinking its market value to 16.7 billion euros ($18.7 billion).

Berlin is pursuing discreet talks with USA authorities to help Deutsche Bank secure a swift settlement and put the bank back on a firmer footing, sources told Reuters.

"Deutsche among banks that need to continue to adjust to convince investors that its business model is viable and has addressed the issues of operational risk arising from litigation", said Peter Dattels, deputy director at the IMF's capital markets division, The Times reported.