A Private Solution to Deutsche Bank’s Public Woes


Deutsche Bank’s sliding share price and capital shortfall call for some creative solutions. And they do not get much more out of the ordinary than an idea that Germany’s corporate titans might take stakes in the lender to help it manage the impact of a potential $14 billion fine from American regulators, as Handelsblatt reported on Oct. 6. It is a less nutty concept than it sounds.

German companies are swimming in cash, which is currently earning little on deposit. The members of the DAX, a stock market index of 30 blue-chip German companies, had $80 billion of cash and short-term investments at the end of the last financial year, according to Eikon data — excluding financial companies and carmakers, whose cash levels are flattered by big finance arms. A big chunk of this corporate liquidity is no doubt on deposit at Deutsche Bank, so it carries the low but real risk that it could be eroded were Deutsche Bank subject to the kind of ferocious “bail-in” rescue inflicted on Cypriot banks in 2013…

A Private Solution to Deutsche Bank’s Public Woes

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