Deutsche Bank Has Been Forced To Attack The European Financial Industry.

Deutsche Bank continues to fall into legal disputes. The US Department of justice's $14 billion fine is only the latest.

It worries the bank that it may need to increase capital to make up for losses, which has led to a 50% drop in its share price since the beginning of the year.

Everyone is very sure that Deutsche Bank must increase its capital.

And Monday

The stock market has hit a new record low. The market is worried that the German government has chosen to stand by and refuse to provide state assistance. This forced Deutsche Bank to make a statement: "John Cryan, the Joint Executive of Deutsche Bank, did not ask the German Chancellor to ask the government to intervene in the MBS case of the US Department of justice." a spokesman for Deutsche Bank said that the guild itself faced challenges. "(Klein)

Premier Merkel has met with Klein in the summer, and has hinted that he should not expect to get government help in resolving disputes with the US Department of justice.

Deutsche Bank's share price fell by more than 7.5% on the 26 day, closing at 10.55 euros per share, due to the fact that the US $14 billion dollar ticket issued by the US judiciary for improper sale of MBS.

"We can't imagine saving German bank with German taxpayers' money. After the Merkel administration denied directly that Deutsche Bank had received a ticket from the US Department of justice, the Deutsche Bank price fell for two consecutive days, continuing to refresh its historical lows today, and also dragging banks and European stock markets.

Analysts pointed out that in Europe's main banks, the capital adequacy ratio of German bank is weak.

As of the two quarter, Deutsche Bank will increase the provision of legal risk to 5 billion 500 million euros, far below US $14 billion.

As a result, the debate over whether Deutsche Bank will become "second Lehman" has become more and more popular since last year.

According to overseas media reports, according to Bloomberg and IHS Markit Ltd data, the financial sector SPDR ETF short target has hit a new high in nearly 7 months, to 4.5%.

Deutsche Bank's crisis has dragged down overseas financial stocks, and Wall Street hunters quickly responded and seized the opportunity.

Soros, an international financial predator, once said that Deutsche Bank is the "most vulnerable" large commercial bank.

At the same time, it made a pre emptive strike of 100 million euros during the market turmoil in the British referendum.

Mike, managing director of Wedbush Securities stock trading business, said that the downturn in the US financial sector last week has dragged down the overall trend. Taking into account the current situation of Wells Fargo and Deutsche Bank, the overall decline of financial stocks will continue and will bring negative effects to the market as a whole.

At present, the market value of Deutsche Bank is less than 15 billion euros, less than 8% of its peak in May 2007.

However, Deutsche Bank's assets still occupy a pivotal position in Europe. Its assets of about 1 trillion and 800 billion euros are equivalent to half of the German economy, and Deutsche Bank is also Europe's largest investment bank.

As we all know, Deutsche Bank is the leading European bank and has the largest derivatives business in Europe. It can be said that Deutsche Bank is the core of the EU financial business.

It is worth noting that the Deutsche Bank Breman brothers have a larger scale and the value of their derivatives contracts is 20 times that of the German GDP.

As early as 2014, the financial blog Zero Hedge found in the annual report of Deutsche Bank in 2013. At the end of 2013, the bank's derivatives holdings totaled more than 54 trillion euros, which was more than 75 trillion dollars at the time of the exchange rate, 20 times more than that of GDP in Germany, and 5 times the total GDP in the euro area.

The continued collapse of Deutsche Bank's share price has raised concerns in the market. How far is another financial crisis from us? Deutsche Bank is the largest financial institution in Germany and even in Europe, and also the cornerstone of the economy.

If Deutsche Bank falls, then the euro will be the next.

The Merkel administration's "relentless" is not without reason. Once the largest bank in the euro area, Deutsche Bank is the cornerstone of the European economy, but once Germany rescued Deutsche Bank, it was difficult to explain the contrast with the previous punishments for the Greek banking industry.

Similarly, Italy, which has been fighting for the direct rescue of the Bank of Italy, will not agree that the German government is not setting an example.

The US dollar rose against the euro on Tuesday, on the side of worries about Deutsche Bank, which led investors to feel uneasy about European banking, which dragged down the euro.

On the other hand, according to the latest polls released by Reuters /Ipsos, Hilary led by 4 percentage points, the US dollar index continued to rebound, and Mexico Peso also rose sharply, boosted by the back-up of the US presidential election debate.

Andrew Lim, an analyst at Societe Generale, predicts that even if the provision is made to meet the reconciliation with the US Department of justice, Deutsche Bank is also facing serious capital shortage.

The International Monetary Fund (IMF) said that Deutsche Bank and other financial institutions were widely implicated and the largest single source of systemic risk in the global banking market. The market worried that if Deutsche Bank failed, it would set off the "European Lehman storm".