Wednesday, September 28, 2016

Contra Merkel, "German government prepare Deutsche Bank rescue plan: Die Zeit"--UPDATED

From Reuters:
The German government and financial authorities are preparing a rescue plan for Deutsche Bank (DBKGn.DE) in case the lender would be unable to raise capital itself to pay for costly litigation, German weekly Die Zeit reported.

According to the draft plan, Deutsche Bank would be enabled to sell assets to other lenders at prices that would ease the strain on the lender and not put an additional burden on the bank, the paper said.

In an extreme emergency, the German government would even offer to take a direct stake of 25 percent, the paper added without saying where it got the information.

A Deutsche Bank spokesman referred to an interview Chief Executive John Cryan gave German daily Bild on Wednesday and denied the report.

"At no point did I ask the chancellor for support. Neither did I suggest anything like that," had told Cryan Bild in response to a different report that said he had asked German Chancellor Angela Merkel for her support with a $14 billion U.S. demand to settle claims it missold mortgage-backed securities....MORE
Update d'Alphaville:

The Deutsche domino
Is there something particularly hubristic about a German bank being the bank to trigger a renewed eurozone banking panic? We think so. 
Here’s Deutsche’s share price as of pixel time (about €10.75 per share). It’s up about half a euro following news on Wednesday that it would be selling off its UK insurance business, the Phoenix Group, to Abbey Life Assurance for $1.2bn.... 
...The German finance ministry, meanwhile, denied a report in Die Zeit that the German government and financial authorities are preparing a rescue plan, which would involve the government taking a stake in the worst case scenario....MORE