Deutsche Bank, another headache for markets – Expansion MX

MEXICO CITY (Expansion) –

The German Deutsche Bank, threatens to pose more of a problem for the already troubled financial markets of the world have presented a great deal of volatility against the electoral process of the united States.

The investment bank, Germany’s largest, is facing an indictment for the improper sale of mortgage bonds that held prior to the 2008-2009 crisis, and must pay a fine imposed by the Justice Department of the united States by 14,000 million dollars.

And according to analysts in the united States, the stock market will not have a fixed course, while this may not resolve this problem.

as the chancellor of Germany, Angela Merkel, said that it will not support with capital to the bank in this lawsuit. In 2016 the bank’s shares have sunk 53 per cent to a low of 10.55 dollars.

"That amount is more than double of what Deutsche Bank has provisioned to meet the legal disputes and close to the market value of the bank (18,000 mdd). The bank has assets of 1.8 trillion euros, more than half of the GDP of Germany," said Santander in a report.

But to put in perspective the value of the fine, the data of the day Tuesday showed that its market value was of 14,551 million euros (mde), approximately 16,318 billion, according to Bloomberg data.

In the midst of this, investors boosted their demand for the Treasury Bonds of the united States, considered one of the safer assets. The performance of the 10-year Bond fell to 1.56% from 1.59% on Monday, in this market when the price of the asset goes up for the high demand, the performance drops.

At the end of June the International Monetary Fund (IMF) said in a report that Deutsche Bank is the bank that contributes most to systemic risk, followed by HSBC and Credit Suisse.

"Deutsche Bank can generate risk aversion, especially because the market is sensitive to any situation, (we will see the reactions) mainly this week," said the director of economic analysis of Bank-Based, Gabriela Siller.

"When there is a news that the market did not expect, and if it is relevant, it generates risk aversion and causes changes in the positions of investment, but all this is very short term," added Siller.
In Germany the concerns generated by Deutsche Bank, did not wait, the largest lender of the country, Norddeutsche Landesbank gave up its plans to sell euro-denominated bond on Tuesday, citing market conditions.

His steps were followed by the airline Lufthansa AG, which withdrew an offer of eurobonds on Monday, after not being able to get the desired price.

The largest shares of Deutsche Bank are BlackRock, Paramount Services, Supreme Universal Holdings and Deutsche Bank AG, according to Bloomberg.