Despite proclamations from various officials, business leaders, and mainstream media pundits that Deutsche Bank's demise was: a) driven by speculators, b) not driven by any need for liquidity, because c) the bank has plenty of capital... it doesn't. As Bloomberg reports, no matter how much the DoJ fine is watered-down (don't expect much), the most systemically dangerous bank in the world is holding informal talks with securities firms to explore options including raising capital; but while the lender has several options, as one analyst noted rather awkwardly, "they’re all unattractive."
After three straight days up - soaring 25% off last Friday's lows, thanks to a disproven rumor of a pending settlement with the DoJ - Deutsche Bank closed down 4% from its opening highs today, beginning the slow path to catch down to CDS-implied pain...
Deutsche Bank CEO John Cryan told Germany’s Bild newspaper in late September that he doesn’t plan to raise capital. But now it seems, perhaps the weakness in the credit market was warranted as Bloomberg reports senior advisers at top Wall Street firms are speaking to representatives of the German lender about ideas including a share sale and asset disposals, said the people, who asked not to be identified because the plans are private.
The bank is more likely to tap existing shareholders for funds to help weather mounting legal costs rather than selling asset management or merging with Commerzbank AG, Autonomous Research LLP said in a note on Oct. 3.
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