In a stark reminder that despite all the operational and management turmoil over the past three years, few if any of the outstanding concerns involving Europe's banking behemoth - Deutsche Bank, which has gone thorugh - with €48 trillion in net notional derivatives has been resolved...
... in its Monday edition, Suddeutsche Zeitung reports that the ECB has asked that Deutsche Bank simulate what a "crisis scenario" would look like, and what it would cost to complete a "resolution", i.e. wind-down, of its own investment banking division.
While DB's calculations have reported been taking place for several months, SZ notes that this is the first time that the ECB supervisory authority has demanded such a measure from a major bank. The German publication also notes that the ECB will demand similar simulations of other banks.
According to the report, banking regulators want to know what the impact would be on the value of Deutshe Bank's capital market and derivatives business if, as a solvent bank, it had to simulate an abrupt end to new business.
One possible need for such a simulation may stem from the recent termination of CEO John Cryan, and his replacement with Christian Sewing, a lifelong retail banker, who some have speculated may seek to wind-down Deutsche Bank's i-Banking division.
To be sure, in order to avoid a panic that the ECB is preparing for the worst and simulating a full-blown Deutsche Bank bankruptcy, SZ adds that the exercise is not about simulating an event of bankruptcy, "which would be many times more expensive and difficult." In response to the article, the ECB said that it generally gives banks many tasks, without elaborating on the "crisis scenario" it has requested.
Meanwhile, Deutsche Bank said it is routinely tasked by regulators to determine "the consequences of orderly settlement of positions in its trading books." Perhaps, but never until now was Europe's biggest bank asked to quantify how the abrupt end of its banking business, with its associated €48.3 trillion in gross notional derivatives, would affect both the bank itself, and would percolate across markets.
Comments
It's on....
Like Donkey Kong
It is all contained. Nobody worry.
It is normal for banks to simulate their own bankruptcies at request of their respective Central Banks.
It is a strong buy at this time.
In reply to It's on.... Like Donkey… by Normalisation …
Gartman doesn't do banks.
Have to ring up Cramer......
In reply to It is all contained. Nobody… by Belrev
BUY BUY BUY!
In reply to Gartman doesn't do banks… by Arnold
"The bank can stay afloat with the first 4 derivatives intact, but not 5, as she goes down into the red, liquidation will spill over from one derivative to the next, back and back, theres no stopping it"
"But what about the QE?"
"The QE buys you time, but months only"
"No matter what we do, Deutsche Bank will founder".
In reply to BUY BUY BUY! by Bondosaurus Rex
I went for sub-prime, over prime.
In reply to Gartman doesn't do banks… by Arnold
push it into a SIV sell shares of investment vehicle - Franklin savings and loan?
In reply to It's on.... Like Donkey… by Normalisation …
The only way Millennialls will take notice if there is a big drop in their Bandwidths. Russia can start a revolution if they get control of the Internet Bandwidth. A revolution of device Zombie users. Start the Bandwidth wars
In reply to It's on.... Like Donkey… by Normalisation …
Hmmmm..... you mean like if DB suddenly can't fulfill its obligations as a counterparty for several trillion in derivative contracts .... yeah ... that might percolate across markets a bit ... but I mean, they're a Primary Dealer, so everything should be ok with them .... right?
In reply to It's on.... Like Donkey… by Normalisation …
Like carrying out a mass school shooting while training for a mass school shooting next door!
What could be easier?
I guess fewer people are buying the hide in plain site moves that have worked for years now.
In reply to It's on.... Like Donkey… by Normalisation …
Uh ohhh ,
Crisis actors on deck!
Do they wear white helmets or are they the tinfoil hat brigade.
In reply to Uh ohhh , Crisis actors on… by Giant Meteor
Carrying "wounded" toxic troubled assets that appear to be unconcerned with their own injured state or the supposed ongoing tragedy around them.
"Don't look at my smartphone! Just keep moving!", Francis Ford Everyman.
Does the EU really want to ask this question? Of DB?
Pulling a bottom stick out of a pile of sticks over 60 trillion high?
[turns a bolt. then a clunk.] "uh oh". "Omen II", when the glyco-organo-phosphate tank blows.
In reply to Do they wear white helmets… by GreatUncle
Thank Jehovah, we're salvaged.
--D Banking Capos
In reply to Do they wear white helmets… by GreatUncle
A storm is coming.
If the Russians want a glass chin knock out punch with global implications.... It's DB the zombie bank that will suck the blood out of the entire financial system. It's not only the 48 trillion of derivatives it's the rehypothecation of stocks, bonds, treasuries, gold, contracts all on an international level. Everything and everybody on the globe will be involved instantaneously. The US markets will be closed for the day by 12:45 PM the day this happens and only trade for 15 minutes as the circuits breakers snap 3 times with appropriate time outs.
In reply to A storm is coming. by SpanishGoop
Bishop here. I'm afraid l have some bad news. Well, that's a switch! It's very pretty, Bishop, but what are we looking for? That's it. Emergency venting. That's beautiful, man. That beats it all. How long till it blows? Four hours... ... with a blast radius of 30 kilometers, equal to about 40 megatons. - We got problems. - I don't fu.kin' believe this! Vasquez, close the shutters. Why can't we shut it down from here? The crash caused too much damage. An overload was inevitable at this point.
https://www.springfieldspringfield.co.uk/movie_script.php?movie=aliens
In reply to If the Russians want a glass… by grove300
A bandwidth storm, if the internet bandwidth drops the Stock exchange and Central Banks will claim the Bandwidth and the Zombies will revolt.
In reply to A storm is coming. by SpanishGoop
That has to be the funniest headline today, thanks Tylers
Arent they already in a crisis scenario?
WTF :/
Zerohedge is full of bull shit.. Deutsche bank is the most stable bank in the history.... Go fuck your selves gold fuvks
All banks are stable until they are not ... so it is just a matter of time.
In reply to Zerohedge is full of bull… by chennaiguy
I am sure the Italians thought the same way about the oldest bank in the world getting thrown in the dumpster. Was that really the first bank or the oldest bank. Im not sure.
In reply to All banks are stable until… by GreatUncle
Until the tide goes back out.
In reply to All banks are stable until… by GreatUncle
Right. I always build sound financial foundations upon mounds of unsustainable derivatives.
In reply to Zerohedge is full of bull… by chennaiguy
Pull it!
I'm more on the page of DB being a great opportunity. Their scenario is way more realistic than American Banks. I think Rob Marstrand, makes it very clear in his latest post:
https://www.ofwealth.com/deutsche-bank-ejects-ceo-stick-stock/
IOW, how many bank liabilities (savings accounts) do you have to confiscate?
Bingo. And how many Eurobucks will they have to print to cover their bets.
TARP and TALF. Repeat.
"Give me your troubled and toxic assets, yearning to be off your books."
In reply to IOW, how many bank… by Savvy
Very soon there won't be a simulation needed. You can only polish a turd so much before you realize it's always going to be a turd.
yeah, but if you lay lacquer or pour epoxy, you can polish it to look like sunshine.
"Once the epoxy has cured, remove your masterpiece from the press/clamps to reveal: a turd..."
How to Do Absolutely Everything: Homegrown Projects from Real Do-It-Yourself ...
https://books.google.com/books?id=xnuMRiHgYFYC&pg=PT540&lpg=PT540&dq=ep…
In reply to Very soon there won't be a… by NemesisteM
But as long as you keep polishing, the sheeple won't blame you for not trying to polish. If the shiny turd finally comes in the sheeple spotlight, plausible deniability + 'Ruskies did it' fixes all responsibility issues that might arise.
In reply to Very soon there won't be a… by NemesisteM
I don’t recall the ECB asking other European (smaller) banks to draft their own crisis scenarios. The ECB would do its own stress test and that is that. In the douche bag too big to fail case they get to draft their own “scenario”. How touching this all is - if one could avoid vomiting.
"Simulate"???
What a load of steaming horseshit.
The crisis is real,they are just calling it a simulation to avert panic and competition while they dump trillions is worthless debt on the markets at wholesale or even below auction prices.
They can Simulate, but that would require them to tell the truth, so No they Can't Simulate.
Didn't they do this already following 2008? Living wills for banks, stress tests, etc? Is it for realz this time?.
Europe is dead with Italy and Deutsche Bank
Deflation
www.canarydeath.com
Deutsche Bomb countdown.
Hang on to your metals, guns and cryptos.
You'll be needing them when that motherfucker of a shockwave hits.
Hold on ZH...first paragraph says $48Trillion NET notional.
Final para' says $48 trillion GROSS notional. Which is it? Because one IS serious, the other is a lot less serious.
Just asking.
Edit, sorry €!
Here's one. WWIII starts full-fledged. Recovery plans irrelevant unless roaches have a central bank nowadays.
The best move for DB would be to start swapping everything it owes for EU and US debt.
Strap it to themaelves like a suicide vest.
Look guys, its just numbers on pieces of paper or in this age ones and zeros in a frekin computer. Don't mean nothin in the real world.
Just remember its he who has the most fire power, will always get the gold.
Game over Vlad !
Buck
BACK to DB PAST...!!!
2016-02-04 13:28
Deutsche Bank or Deutsche Casino ...
http://www.atafinancialresearch.5v.pl/wpis%2cdeutsche%3bbank%3bor%3bdeu…