Deutsche Bank shares and other euro lenders fall Cryptocurrencies and ICOs

Deutsche Bank shares tumbled on Friday, along with shares of other European banks, amid investor concerns about the stability of the global banking sector. The drop comes on the back of Credit Suisse’s recent emergency bailout and follows losses in US banks on Thursday.

Deutsche Bank credit default swaps jump to 4-year highs

European bank shares, especially german bankfell before the weekend amid lingering concerns among investors about the state of the banking industry in the Old World, across the pond and beyond.

Having lost a fifth of its value since the beginning of the month, Deutsche shares plunged nearly 15% on March 24, their lowest level in five months, Reuters noted. The report noted that in just one week, Germany’s largest lender has seen $3 billion of its value wiped out.

The drop followed a significant increase in the cost of insuring the bank’s debt against default risk. Deutsche’s credit default swaps hit more than 220 basis points, the most since late 2018. Two days ago, they were around 140 basis points.

Swaps were also increased for other leading European banks. Shares of Commerzbank, another German banking giant, France’s Societe Generale and Spain’s Banco de Sabadell also fell sharply on Friday, Bloomberg reported.

Deutsche Bank has been in the spotlight after the recent government-backed takeover of Switzerland’s Credit Suisse by rival UBS. Both groups are now under scrutiny in connection with a US Justice Department investigation into whether bankers helped Russian oligarchs evade Western sanctions.

Meanwhile, the Stoxx 600 index of European banks, excluding Credit Suisse or UBS, fell more than 5%, nearing a monthly drop of nearly 20% after one of its most volatile trading weeks over the past year. .

Deutsche Bank was the biggest loser on Friday, prompting a reaction from German Chancellor Olaf Scholz, who rejected comparisons to the Credit Suisse case. At a summit in Brussels, the Financial Times quoted him as saying:

Deutsche Bank has fundamentally modernized and reorganized its business and is a very profitable bank. There is no reason to worry about it.

The latest negative development in Europe follows a sell-off in US banks on Thursday amid turmoil among regional lenders. It happened despite Treasury Secretary Janet Yellen’s statement that regulators would be prepared to further protect deposits, if necessary, to prevent contagion.

European financial authorities have been ensuring that banks are better capitalized and regulated now than before the start of the previous global financial crisis. This year’s troubles began with bank collapses in the US, including those of crypto-friendly Silvergate Bank and Silicon Valley Bank.

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Lubomir Tassev

Lubomir Tassev is a tech-savvy Eastern European journalist who likes Hitchens’ quote: “Being a writer is who I am, more than what I do.” In addition to crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.