Embargo: 06.00 am Wednesday 19 October 2016
UK liability if Deutsche Bank fails needs to be identified
‘The Deutsche Bank liability’ written by Bob Lyddon, a City management consultant with considerable experience of the banking sector, explains why Deutsche Bank is in trouble and how the UK could be stung for billions of pounds.
Commenting on his findings Bob Lyddon said:
“The Deutsche Bank appears to be in serious trouble, it is highly leveraged and facing a fine that would make it even more highly leveraged.
“Deutsche Bank purports to be easily compliant with the required levels of capital for its status as one of Europe’s biggest banks but at the same time is highly leveraged.
“Assumptions that the bank has enough assets and collateral to sustain a crisis have been found to be fallacious before in other banks. It is vital that the Treasury and British taxpayers know the potential damage if Deutsche Bank requires a multi-billion-Euro bail-out that the UK might have to contribute to.
“Deutsche Bank has major relationships with the European Central Bank and the European Investment Bank, in which the UK is a shareholder. Losses incurred at the ECB or the EIB could cause those institutions to call up new capital from the UK, costing billions of pounds. A full examination of the risk Deutsche Bank represents to the UK is required, and required now.
“To complicate matters further, Deutsche Bank’s status as a foreign branch here means bank supervision is split over at least four entities (BoE and FCA in UK, Bundesbank and BAKred in Germany), leaving it unclear who in the UK has taken ownership of ensuring a coordinated regulatory response regarding the risks to the UK”
Download the Media Release: gb-media-release-08-19-10-16-deutsche-bank-fail