"Deutsche Bank is facing a criminal investigation into money laundering." This head of the New York Times It was the last bad news of another complicated week for the largest German private bank. According to the newspaper, the FBI is investigating it for alleged illegal activities in transactions made by companies, among which those of Jared Kushner, son of the President of the United States, Donald Trump.
The investigation is an episode of more than one entity that has been with us for a long time. The scandals of corruption and bad practices, coupled with the fall in the price of their shares and the bad business results, have long touched the brand of Deutsche Bank, which one day was one of the main values of the German economic miracle.
"Deutsche Bank is a criminal association?" Wolfgang Hetzer, a German jurist and author, was asked rhetorically a couple of years ago in a book that offered a devastating vision of one of the largest financial entities on the planet. Hetzer dedicates almost two pages only to list all the allegations and suspicions facing the bank: failure to comply with the obligation to report speculative practices with interest rates, cartel practices, falsification of information, handling of bank balances, etc.
New 'bad bank'
Speculations about the near future of the bank have been fired again with the publication by international agencies of internal information that point to the creation of a new bad bank to liquidate toxic assets that Deutsche Bank has dragged for years. The objective would be to give away 50,000 million euros of toxic assets.
This is not the first time that the Deutsche Bank has built one bad bank to clear accounts. After four years of experience, in 2016 another was closed bad bank where he had put 128,000 million toxic assets. "This new one bad bank It's not a big deal, "says Gerhard Schick, a former German MEP, in the ARA and exported from the Greens to the Bundestag. "50,000 million is not a big volume, it has little impact on its own capital," he adds.
The creation of this new one bad bank, still not confirmed, is framed in a new strategy announced by its CEO, Christian Sewing: to flee from the investment bank to bet on the financing of the commerce and the management of patrimony. The strategy seeks to achieve more secure and stable income.
"The reduction of investment banking is, in principle, a correct decision. I note the situation with concern, because the Deutsche Bank is still too big to fall, "explains Schick. The expert refers to the English expression too big to fail ; That is, the fact that the business volume of a bank (and its debt) is so great that in the event of a bankruptcy, the state can not rescue it and may convey it to other entities.
This was the argument that blocked the merger of Deutsche Bank and Commerzbank driven by the German finance minister, the Social Democrat Olaf Scholz. With this merger, Scholz sought to establish a financial giant, but this April the two banks announced that they abandoned the plans.
In Schick's opinion, Deutsche Bank's failed claim shows, however, the need for further reforms: "We urgently need a control mechanism for mergers to prevent banks that are already too big to become even bigger."
. (tToTranslate) economy (t) unemployment (t) financial crisis (t) cash (t) Bank of Spain (t) ECB (t) IMF (t) stock exchange (t) Ibex (t) CPI