Will John Cryan's name go down in the annals of financial history lore alongside Erin Callan, Joe Gregory, and Dick Fuld?
Given the extreme level of denial and hubris the Deutsche Bank CEO reportedly uses in an interview with Germany's Bild magazine, we'd say chances are better than even.
Echoing Fuld's blustering 2008 description of a Lehman balance sheet with "billions in highly liquid assets," along with his plan to sell prized assets, and threats to "hurt the shorts";
Deutsche's Cryan stated unequivocally that the bank is "comfortably equipped with free liquidity," that he sees no need for a capital raise - as he plans to sell Postbank - and a state bailout "is not an issue for us," could not understand "how someone can say that."
As a reminder, here are some special moments from Fuld and Callan's mouths as Lehman fell...
March 2008: Lehman had eliminated close to 4,000 jobs in the last year.
April 2008: "The worst of the financial crisis impact is behind us" ... "environment will remain challenging for a while"
" by adhering to strong risk-management standards and running the company well, "I will hurt the shorts, and that is my goal."
Lehman has more than $35 billion of cash and liquid assets and another $65 billion of "unencumbered" assets that aren't pledged elsewhere and can easily be turned into cash, Fuld and Chief Financial Erin Callan said Tuesday.
The CEO of Deutsche Bank sees no need for state support of his institution. In an interview with "Bild" (Wednesday) John Cryan said aloud advance notification to the question whether the Bank need government aid: "This is not an issue for us."
The manager had also jected reports and speculation about alleged talks with German Chancellor Angela Merkel (CDU) on state aid for the German bank. "I have not asked the Chancellor at any time for help. I have indicated like nothing." Cryan said. He could not understand "how someone can say that."
Even its shareholders do not want to ask for help of the German Bank CEO. "The question of a capital increase currently does not arise," said the manager. The Bank met all regulatory capital requirements. They have "far fewer risks in the books than in the past" and was "comfortably equipped with free liquidity".
The CEO described the situation of Deutsche Bank as better than it was currently perceived from the outside.
So no capital increase, plenty of liquidity, and fewer risks?
Investor jitters were stoked by a preliminary Justice Department request that the bank pay $14 billion to resolve a probe into its handling of mortgage-backed securities. The company has said it expects to whittle down the settlement amount, just as other Wall Street banks did during their talks.
“It was clear from the beginning that we would not pay this sum,” Bild quoted Cryan as saying.
“The Department of Justice will treat us with the same fairness as American banks that have already agreed on a compromise."
The bank is also selling assets (just like Lehman)...
The CEO stressed that he considers the planned sale of Postbank started: ".. Everything is ready, we could pass Postbank tomorrow into new hands - but then the price has to be right, we have time."
When asked whether there would be a bonus waiver for directors like 2016 again next year, Cryan said:
"We're in a difficult transition, everyone knows that no one harbors unrealistic expectations.."
So there you have it. Nothing to see here at all. All you hedgers and speculators are crazy...
So who blinks first? The ECB - knowing the collateral chains that will snap. The Bundesbank - knowing their entire banking system is at risk. The German government - knowing it's over for them if DB depositors have to take a haircut... Or Brussells - who know the entire EU plan is teetering is done if anything but the 'rules' are applied to Deutsche. For now, there is one thing for sure - the market will press for one of these players to be forced to make decision.