Deutsche Bank CEO Writes Memo To Employees, Blames "Speculators", Confirms Liquidity Flight

Tyler Durden's picture

Instead of doing what many have correctly suggested he should be doing, namely focusing on ways to raise more capital for the undercapitalized Deutsche Bank in order to stem the slow (at first) liquidity leak, first thing this morning CEO John Cryan issued another morale-boosting note to employees of Deustche Bank who have been watching their stock price crash to another record low, dipping under €10 in early trading for the first time ever. In the memo the embattled CEO worryingly did what Dick Fuld and other chief executives did when they felt the situation slipping out of control, namely blaming evil "rumor-spreading" shorts, saying "our bank has become subject to speculation. Ongoing rumours are causing significant swings in our stock price. ... Trust is the foundation of banking. Some forces in the markets are currently trying to damage this trust."

Just as important, Cryan confirms the Bloomberg report that "a few of our hedge fund clients have reduced some activities with us. That is causing unjustified concerns." As we explained last night, the concerns are very much justified if they spread to the biggest risk-factor for the German bank: its depositors, which collectively hold over €550 billion in liquidity-providing instruments.

He then tries to sweep the concerns under the rug saying that "We should consider this in the context of the bigger picture: Deutsche Bank overall has more than 20 million clients." Of course, however by the time the "context" switches over to the rest of the clients, or even a small portion of them, namely the depositors, it would be too late as by then the retail bank run will have begun.

Finally, Cryan confirms that there has been a liquidity outflow, when he says that the bank's liquidity reserves currently "amount to more than 215 billion euros." Considering just last night we estimated the liquidity reserves were €223 billion as of June 30, it appears there has been a modest outflow, even when accounting for the recent disposal of the British insurer Abbey Life.

In other words, Cryan once again fails to provide a clear plan how he will short up the bank's deteriorating liquidity, no mention of a capital raise or approach of the ECB, and most importantly, no specifica plan how to recover crumbling trust in the world's "most systematically important bank."

Cryan concludes by saying "You will hear back from me soon." On this he is absolutely correct.

Cryan's full memo to employees released early this morning below:

John Cryan, Deutsche Bank CEO, sent out the following message to the Bank’s employees on September 30, 2016

Dear Colleagues,


You will have seen speculation in the media that a few of our hedge fund clients have reduced some activities with us. That is causing unjustified concerns. We should consider this in the context of the bigger picture: Deutsche Bank overall has more than 20 million clients.


I understand if you feel concerned by the extensive coverage on this issue. Our bank has become subject to speculation. Ongoing rumours are causing significant swings in our stock price.


It is our task now to prevent distorted perception from further interrupting our daily business. Trust is the foundation of banking. Some forces in the markets are currently trying to damage this trust.


Deutsche Bank has strong fundamentals. Let me mention some of the most important facts at this point:


1. We fulfil all current capital requirements and our restructuring is well on track. We completed the disposal of the British insurer Abbey Life this week and the sale of our stake in the Chinese Hua Xia Bank will be finalised soon. This will further improve our capital ratio.


2. We have significantly decreased our market and credit risk in recent years. At no point in the last two decades has the balance sheet of Deutsche Bank been as stable as it is today.


3. Despite low interest rates and a difficult environment we posted a pre-tax profit of about 1 billion euros in the first half of 2016. Before extraordinary items like restructuring costs, we earned about 1.7 billion euros. This demonstrates the operating strength of Deutsche Bank.


4. In a situation like this, the most important factor is our liquidity reserves. Currently they still amount to more than 215 billion euros. This is an extremely comfortable buffer. This is clear proof of how conservatively we have planned. This is acknowledged by numerous banking analysts.


There is therefore no basis for this speculation. Nor can uncertainty about the outcome of our litigation cases in the US explain this pressure on our stock price, if we take the settlements of our peers as a benchmark.


You have all done a tremendous job over the past few days. You are the ones who are in constant contact with our clients and making it clear how Deutsche Bank is really doing. You are Deutsche Bank – that is impressively clear. All of us in the Management Board highly appreciate it.


You will hear back from me soon. Please keep working as you have been doing so far. We are and we remain a strong Deutsche Bank.


Yours sincerely,
John Cryan

And here, for the new generation of "traders", is Dick Fuld's famous "squeeze the shorts" speech:

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Impoverished Psychologist's picture

Aaaaaand it's gone....


EscapeKey's picture


Boris Alatovkrap's picture

Douche Bank is experience "Liquidity Problem"? That is what, like Fiscal Diarrhea, or irritable of bowel? Maybe is like puss leak down leg of toothless washup whore stumble through alley look for next fix…

JRobby's picture

Proving once again that sociopaths do not think logically.  They are successful when things are going well and become illogical infants when the game goes against them.

Yet these are the people that end up in positions of power over and over again. 


jcaz's picture

It's never our fault, it's always someone else's fault-  our shit stink is lilly fresh....

Funny- we want trust from you, you want collateral from us.....

JRobby's picture

The basic "confidence game". Put the people in charge that take illogical risks and reward them excessively for doing so.

This only works in the "accumulation" phase of the scheme.

Now comes the panic.

Cognitive Dissonance's picture

I thought the ECB and the FED had removed all panic potential because they have our back?

Well....not 'our' back. 'Their' back.

Jayda1850's picture

"They have (a knife in) our back" is what you were getting at I think.

Captain Chlamydia's picture


Dear Colleagues,


You will have seen speculation in the media that a few of our hedge fund clients have reduced some activities with us. That is causing unjustified concerns. We should consider this in the context of the bigger picture: Deutsche Bank overall has more than 20 million clients.

So..... 20 million clients to suck financially dry.... 

Squid-puppets a-go-go's picture

can I just say.... FCKN DERRRRRR of course DB is hostage to speculators - THE WHOLE FCKN GLOBE IS when the financial system dwarfs the real economy to this extent. EVERY financial corp is at the whims and hopefully-lacking-in-mercy- of 'speculators' - thats PRECISELY WHERE YOU FUCKERS HAVE LED ALL OF US

far freakin out.

the bridge's picture

My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do...

ATM's picture

DB is the speculator that DB is warning us about.

JackT's picture

Memo reads more like a plea to stay with the company and not jump ship..or out a window. 

Stainless Steel Rat's picture
Stainless Steel Rat (not verified) jcaz Sep 30, 2016 6:13 AM

Dear Investors,

You're Welcome.

Kidbuck's picture

Yup, a shrewd investment when they win and fucked by speculators when they lose. 

RiverRoad's picture

If they want to inspire trust and raise capital, deep salary cuts at the highest level are a good place to start.

Arnold's picture

Make an appointment with the COO and practice your noose tying skills while waiting for him to see you.

It may even plus the nonplusable receptionist.

RiverRoad's picture

The New World Disorder.  We're lookin' at it.

Killdo's picture

Psychos use a different (conscience-free) logic considering they simply don't care about what others think. Like the UK royal family, they never admit they did something wrong. Like jews (or gypsies I've seen in Serbia as a kid) they want everyone to always feel sorry for them (so to make it easier to exploit these very people who are made to feel sory for psychopaths). Psychos are masters of turning other people's instincts and goodness against them (and this works very well for them in societies brainwashed to love their enemies/psychopaths and to turn the other cheek, to glorify submission, fear and stupidity such as here in the US)

Steve Jobs used to walk arond Apple and engineers woudl approach him to show what they invented. SJ woudl look at it and say : This is shit!

Then the next day he woudl come to the same engineer and tell him :look what I have invented (and he woudl show the very thing the guy showed him before SJ said it was shit).

He did that with many people all the time according to his biography. He never admited it was others who invented what he claimed to have invented - just one of many psychopath's games he used to play with people.

Steve Jobs, Hitlery, Trump etc - they are all like like that  - they know normal people would never lie that way (and find it hard to believe anyone else would - because it's so illogical to non-psychos) - so that's exactly why psychopaths do it.

I think Psychopaths in power (and Sheeplez doing nothhing about them - or even worse cheerleading for psychos like most Americans do ) is the biggest problem we face today. The more people learn how to spot them, the better our chance of survival. Religious brainwashing (teaching people to be submissive slaves proud of their ignorance and fear) is a main reason psychos are still surviving and prospering esp in the USSA

JackT's picture

Yeah. Probably the whore. Only she's slept with the entire town and now everyone is not feeling so good.

new game's picture

and who said man can not live w/o woman?

Silver Bug's picture

This is the beginning of the end boys and girls. Contagion is setting in and it's going to get ugly.

doctor10's picture

Germany is about to have their Deutschmark forced upon them-as it is the only answer to this mess

JohnGaltUk's picture

I think this is what Merkel is planning. Remember last month when she told Germans to stock up on water and food because of "Terrorist Threat"

Well terrorist threats are nomally local and not a big deal that would cause food and water shortages but substitute "Terror Attacks" with "Banking Collapse" and it is making a lot of sense. She may use the collpase of DB to introduce the DM again. Why let a good crisis go to waste.

Back in the last crisis there was a very large roumor at the time that Germany had already printed the DM's and were ready to go in case Dragi didnt make it with "we will do whatever it takes". Merkel must be getting sick of looking after the Euro against the wayward Greeks, Italians, Spanish and French.

It would free Germany of having to baby sit the wayward countries. Many positives for Germany for a little pain. The DM has a lot of credence still and would be easily accepted again.

Kidbuck's picture

Since Merkel is Frou Hillary's favorite socipath, expect this in your future America. Hillary bucks backed soley by the integrity and trust-worthiness of Hillary Clinton.

doctor10's picture

Merkel would have to step down tho to let the DM on board. She's supposed to be the glue to keep Germany within the EU.

The DM tho would be the move that would allow Germany an easy pivot toward the East-and would reduce the risk of another European War

JRobby's picture

Financial Terrorists. They hide in plain sight like the bombers and shooters.

Wannabe_Oracle's picture

The ECB will bail them out, they have to. ./

new game's picture

ahhhh, yea. TBTF means bailout/in or whatever it takes. doom porn at it's best-lol.

Panic Mode's picture

Tick tock, tick tock. 

RawPawg's picture

don't blink

or you'll miss seeing that 215 bil...just zapped away

Jayda1850's picture

When people,  whose entire existence relies on trust, have to put out continuous statements to reassure that trust, I would say it already game over. 

BurningBetty's picture

Whatever you do, just don't tell the markets that.

Yes We Can. But Lets Not.'s picture

Is John Cryan to DB what Dr. Lisa Bardack is to HRC?

Covering for a truly unhealthy old girl?

fattail's picture

The first rule of banking:  No one talks about their liquidity.

Its right there on the balance sheet everyone can see your liquidty. 

If you have to tell everyone how strong your liquidity is, you are short of liquidity.

K_BX's picture

Polititian from Argentina: Friday: Your money is save. Monday: Banks are closed.


JustPrintMoreDuh's picture

"Trust is the foundation of banking" - BWAHAHAHAHAHAHAHAHA

Kidbuck's picture

Fuck, now you tell me. I'm selling all my hard assets and investng in banker trust.

ParkAveFlasher's picture

Market control is the foundation of banking.

Grave's picture

trustless banking, secured and verified by math and science
= bitcoin

asierguti's picture

When everything is going well, you don't reassure your employees and the market about it.


When you are told that everything is OK and the company is solid, it's time to panic. Specially if they blame speculators. By the way, didn't DB speculate with LIBOR, FX, gold, silver, etc?

LadiesLoveCoolJames's picture

He is focusing on securing much needed capital. Whatever it takes to get Daddy to open up his wallet and give up that money. This is just made for TV drama designed to build suspense. The bailout is all ready to go and no blame will be found. What I find interesting is that the talking foreskins on CNBC aren't even bashful anymore. That are just flat out demanding the Germans to get busy with the free money. All shame is lost forever.

medium giraffe's picture

Of course speculation is the problem.  DB's speculation. 

Check down the back of the couch Cryan, sure you can find enough old DMarks to re-capitalise.

Panic Mode's picture

Yeah, EU, Euro, ECB, Juncker and Merkel. You can keep all of that. I keep my sterling, Brexit and tangible assets.

joga bonito's picture

Its going to be a long weekend John, don't switch off your phone Draghi and Merkel have you on speed dial!

Last of the Middle Class's picture

No doubt. If the CEO is confirming a liquidity outflow, HE is the damn speculator!!! Same as a child threatening to run around the house naked if he doesn't get what he wants! Shut the motherfucker down!!

williambanzai7's picture

Shut down the bankster RICO Cartel!