Some Deutsche Bank Clients Unable To Access Cash Due To "IT Outage"

Tyler Durden's picture

While it now seems that Friday's rumor of a substantially reduced Deutsche Bank settlement with the DOJ, which sent the stock price soaring from all time lows, was false following a FAZ report that CEO John Cryan has not yet begun the renegotiation process, and in the "next few days" is set to fly to the US to discuss the proposed RMBS misselling settlement with the US Attorney General, Germany's largest lender continues to be impacted by the public's declining confidence, exacerbated over the weekend by a disturbing "IT glitch."

For one, it remains unclear if Friday's report halted, or reversed, the outflow of cash from DB's prime brokerage clients, which as Bloomberg first reported last week was a major catalyst for the swoon in the stock price. However, as UniCredit's chief economist Erik Nielsen notes in a Sunday notes, one thing is certain: "so long as a fine of this order of magnitude ($14 billion) is an even remote possibility, markets worry."

There is also the threat of the bank's massive derivative book, which despite attempts of many pundits to gloss over, over the weekend none other than JPM admitted that that is what the markets will likely be focusing on for the foreseeable future: "In our opinion it is not so much funding issues but rather derivatives exposures that more likely to trouble markets going forward if Deutsche Bank concerns continue.  This is especially true if these concerns propagate into a confidence crisis inducing more rapid unwinding of derivative contracts."

Indeed, as we first hinted last Thursday...

...  and as CNBC's Jeff Cox correctly observed subsequently, at the core of this week's investor angst is a word that came up during Bear's demise: "novation," or a request by hedge funds that deal with the bank to have others take their place in derivatives trades. In the case of Bear Stearns, word in March 2008 that Goldman Sachs had refused a novation request spread panic through Wall Street.

A few days later, the erstwhile Wall Street institution was no more. Though Bear was loaded with toxic assets, it was essentially a rapid crisis of confidence that had done in the firm.

 

That's why Thursday's news that a couple of hedge funds doing business with Deutsche were trimming their sales caused such a ruckus in the market. A Bloomberg report indicated that three hedge funds that do business with Deutsche were reducing their positions, causing afternoon market hyperventilation that the funds were losing confidence in the bank.

But while DB's market woes have been duly discussed, at home, the bank is fighting a "rearguard action" as Reuters writes, seeking to shore up confidence among the public, politicians and regulators who say the bank brought many of its problems upon itself by overreaching itself and then reacting too slowly to the 2008 financial crisis.

Making matters even worse, as Reuters and Handelsblatt reported, the bank suffered a further blow to its image this weekend with a third IT outage in the space of a few months on Saturday "that prevented some customers getting access to their money for a short time."

Handelsblatt adds that "among rumors about state aid, the dramatic fall in its stock price, and an attack by hedge funds on the most important domestic bank, now come reports of a new IT glitch. "Customers can not access their cash because it is blocked", a customer complained on Saturday morning to Handelsblatt, adding that "I am stunned: I can't make weekend purchases since I can neither get cash nor pay by card."

 

While the bank emphasized that the glitch was temporary, "and only a few customers were affected", it was still an embarrassing moment as this was just the latest "glitch" to affect the bank.

One week ago, the bank suffered delays and errors in its online banking platform, and in many cases deposits and debits "were displayed twice or not displayed at all." In June, customers were unable to withdraw money. Also, as reported here, in late August, Deutsche Bank was forced to make a statement after reports emerged that it was unable to provide physical gold upon request for delivery from the Xetra-Gold ETN. This is what DB said:

As one of the sponsoring financial institutions, Deutsche Bank fulfils the obligations specified in the Xetra-Gold sales prospectus as a matter of course. This includes fulfilling claims to the delivery of physical gold certified by Xetra-Gold. This must take place through the investor’s principal bank where the investor’s securities account is maintained. Deutsche Bank accepts such orders for delivery from its clients. The investor incurs the costs described in the sales prospectus, for example, for the forming, packaging and the insured transport to the place of delivery. For this reason, we recommend in each specific case an individual review of the economic efficiency of a physical delivery. Should an investor’s request for the handover of physical gold not have been complied with immediately in individual cases, this will be reviewed and an individual solution will be found with the client.

Less than a month later, rumors of a state bailout of Deutsche Bank had gripped both the capital markets and the press.

* * *

As a result of the ongoing crisis of confidence, DB has gotten an outpouring of both industry and regulatory support. German business leaders from companies including BASF, Daimler, E.ON, RWE and Siemens lined up to defend the bank Sunday in a front-page article in the Frankfurter Allgemeine Sonntagszeitung. "German industry needs a Deutsche Bank to accompany us out into the world," BASF Chairman Juergen Hambrecht said. Curiously, a spokesman for a blue-chip company that did not feature in the article told Reuters he had been asked by Deutsche for an executive to provide a similar supportive comment.

It did not stop there: in an interview with the Frankfurter Allgemeine Sonntagszeitung newspaper, the head of Bafin, Felix Hufeld said: "I warn people not to let themselves be drawn into a kind of downward spiral of negative perception. Not every nervous market reaction is backed by objective facts" warning of negative perceptions that could lead to downward spirals on the markets.

Which, perhaps, goes to underscore the biggest problem for Deutsche Bank: the bank and the government in Berlin have had to play a delicate balancing act, emphasizing the substance and importance of the bank without implying any need for state aid or willingness to supply it. Both the bank and Berlin this week denied reports that the government was preparing a rescue plan, even as the outpouring of moral support for the bank continues.

Finally, any negative news in the coming days, whether involving the just filed charges in Italy over the falsification of Monte Paschi accounts and "market manipulation", more reports of cash outflows, or news of further operational weakness, may lead to a prompt return of the panicked selling. Just moments ago, Bloomberg reported that Deutsche Bank is poised to reach an agreement with labor representatives this week that will pave the way for eliminating another 1,000 jobs in its home market. The cuts will mostly affect back-office staff such as in IT services.

We hope that among those IT specialists laid off are not the ones responsible for keeping the bank's online bank accounts and ATMs online, because a few more "IT glitches" that prevent depositors from accessing their cash could be all that it takes for DB's impressive liquidity position as described here first last week, to become rather, well, "deplorable."

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Fisherman Blue's picture

IT outage? Bet that shit. Would be bad for them if they told the truth that it is a liquidity shortage. How do you say bail in in german? Or better yet how do you say your fucking money is belonging to us in german.

UndergroundPost's picture

So long DB. And in other news,  this could set off a sell off that sinks Hillary's campaign.  

knukles's picture

But the deal you guys were trusteeing and custodying told me I could get my gold bars from you via this ATM.
Assholes.

SomethingSomethingDarkSide's picture

Boom goes the dynamite - $50 withdrawal limits for all the peasants!

BaBaBouy's picture
DB ~ "IT Outage"

Oh-Oh ~~~

BaBaBouy's picture

Wait ~ Isn't DB one of the owners of the Private FED ?

They will be somehow Bailed (In / Out / Upsidedown) Whatever, they will be bailed ~~~

$50 TRILL Black Hole For World Finance System Is TOO much To Allow To Sink for the FED ...

lance-a-lot's picture
lance-a-lot (not verified) BaBaBouy Oct 2, 2016 10:22 PM

The SAUDIS withdrew all their CASH following Congress's stupid Sept 11 Bill. https://goo.gl/oehIgG

rcintc's picture
Some Deutsche Bank Clients Unable To Access Cash Due To "Liquidity Outage"  

There - Fixed it for you!

847328_3527's picture
Germany sees surge in number of refugees receiving benefits

 

About half a million refugees in Germany received social security benefits in June, almost twice as many as a year earlier, potentially fueling tension among voters over the recent influx of refugees and heaping pressure on Chancellor Angela Merkel.

 

http://www.foxnews.com/world/2016/10/01/germany-sees-surge-in-number-ref...

Handful of Dust's picture

"Dear Valued Customer,

 

Your check ist in sie mail.

 

Warm Regards [from the Caymans],

Your Bank President,

Herr Küss Meinen Arsch"

The central planners's picture

Will need tons of more rumors by "credible news outlets"

813kml's picture

Needless panic, Bloomberg sez there's a SnapChat rumor that shit's all totally supercool and stuff.

LadiesLoveCoolJames's picture

DB gets wut lookin for 2B no guilt all good

847328_3527's picture

"credible sources" tell me that Hillary wears size Plus 6X boxers.

Folkvar's picture

This happened with Natwest several times a couple of years back. People could not get cash or use their cards. Yet we read the same thing in this article. People never learn. Have cash at hand at home, enough for at least a few months. So many people are going to go into total meltdown when the banks closed their doors. You can't fix stupid.   

BurningBetty's picture

Got cash, got gold, got silver and trading account...and spending money only from credit card ???? which means I spend the banks money, and then at the end of the month I balance out the card.

nscholten's picture

Using the credit card is enabling the system.

thestarl's picture

Agree,though the problem is just so many living week to week.

 

effendi's picture

Same thing happened here with my Credit Union (Australia) about 30 years ago. They merged with another Credit Union and the IT failed. Could not withdraw money through ATMs for 6 weeks until the mess was sorted. But they did allow over the counter withdrawls at the head office (700 miles away) but even that option was not possible as I ran out of petrol within a week and had to walk to/from work each day (7 miles each way) to make what little cash I had last (for luxuries like food). I always now keep 3+ months of food in the house for the next time (plus some cash for any expenses).

Lorca's Novena's picture

Short to .0001 . Ironically if my margin was funded by DB would they notice? lolz

Just like Soros betting against humanity I suppose

Tall Tom's picture

 

 

 

 

DB STAWK does not change price tomorrow.

 

wee weed up...German Three Day Holiday

 

On the other hand on Tuesday???

 

I will gladly pay you Tuesday for a Hamburger today. That is the DB model, as well as the rest of the damned Hpuse of Cards Model.

 

This whole damned system is about to be taken down. I cannot be any more pleased.

 

When $60 Trillion in "notional", which is backed by a paltry $17 Billion in reserves, defaults then notional becomes very real very rapidly.

 

Nobody can pay that off. No financial entity on the Planet has that. No nation has that. All of it becomes due upon a default.

 

They call in your entire mortgage when you default. That is notional turning quite real...fast. The ENTIRE NOTE becomes due in a foreclosure.

 

It is no different. All of those $60 Trillion in Derivatives become payable at once. The cascading affects cannot be contained. The Chain Reaction will explode all Derivatives...inclufing your cash...which is also a derivative.

 

I have been praying for this day of mass destruction of the most corrupted system on the face of the Planet.

 

Becoming free from the chains of the enslavement and bondage will be challenging if not exhillerating.

 

Hope you are all ready.

 

And those bastards who  have devised this deserve all that they have coming and much, much more.

 

 

JRobby's picture

They emptied the ATMs. Lets see what happens when the counters open in about 8 or 9 hours.

Mr Pink's picture

10/3 is a German holiday. Markets and banks closed

scintillator9's picture

I do believe that DB can be traded in the US on 3 October.

DB in Euros (European trading)

DB in Dollars (US trading)

Freddie's picture

This is anther USSA zio con soros hit on Germany.  400 years of mass murder and rape of CHRISTIAN German citizens by zio banksters. Mass murder with endless wars.  Just like the mass murder of 25 million Christian Russians by the zio Bolsheviks.

This is hit just like the VW hit. Obma will have a few more hits on German companies to steal a few more tens of billions.  This is just the zio cons plundering companies with these phony fines.  Just like the hit on BNP PAribas a few years ago.  BNP was moving away from the dollar.

Germany needs to get the f**k out of ZATO  

Still the dumb Germans vote CDU/CSU and SPD like sheep.  Merkel should be getting what Mussolini got.    I think Mussolini at least cared for the Italian people. Merkel and her gang are Soros/Red Shei;d  shit.

813kml's picture

10/3 is also end of Oktoberfest, perfect timing to drink into a blissful stupor.

Mr. Universe's picture

You would think that Oktoberfest would be target one for the invading hoards of righteous jihadists. Could it be that a lot of Elites attend this event and so it's off limits?

Curiously_Crazy's picture

You're telling me there's a perfect time to drink into a blissful stupor?

Damn and here I was thinking every morning after breakfast was that time.

OverTheHedge's picture

You wait till AFTER breakfast?  How very reserved of you.

Scotch on the cornflakes for me :-)

RafterManFMJ's picture

...trimming their sales...

Intentional or not, that was pretty good.

SoDamnMad's picture

Oh, you missed the point of the timing of the CEO's visit to the US to negotiate with the AG. What he is doing is waiting for the big check to clear into the CGI's bank account.  Then,depending upon the size of DB "donation" will the 14 billion be reduced down to something that will take the heat off.

Allen_H's picture

Bail in = Einbeziehen.

Bail out =Sicherheitsleistung.

Belrev's picture

That is what you get when you hire Indians to do all of your IT.

RafterManFMJ's picture

7-11 or casino Indians?

Freddie's picture

I had a friend who si a middle aged American programmer.  The guy is very good.  He worked as a subcontractor for the JP Morgue.  He could be a full timer anywhere but he likes contracts.

He used to get calls at 3 am east coast time because some Indian touched something in Mubai or Bombay what ever.  He would have to log on and fix the shit they (hadji) messed up

He told the headhunter to never put him on any bank contracts ever again.

He did work for prestigious universities and said the whole research grants at universities are a tens of billions total SCAM.

 

umdesch4's picture

I also work in IT. Have for over 20 years. Mostly data analysis, database programming, and data modeling these days for accounting-related stuff. Your friend is absolutely correct, on both counts.

Conax's picture

"Ihr verdammtes Geld, das uns gehört."

Something like that.

Allen_H's picture

Sheiße! or Sheisse! :)

Repetition is the key to language learning.

Yen Cross's picture

  lol--- Forward Soviet  

    The cliff is just behind you

Yen Cross's picture

 If you want your  bail in', you can have your bail ins'<<<

Handful of Dust's picture

"We need some common sense withdrawal legislation."

oncemore's picture

temporariy and an accident.

DetectiveStern's picture

Most bank payment systems will have a liquidity throttler (it's a requirement in some markets such as CHAPS) if too much money is going out the throttler will stop all payments the result of which is technically an "IT outage".

I think we are going to see a lot more throttlers being hit and more payments stopped due it "IT outages"