Deutsche Bank is in trouble, some of it its own making.\u00a0 Its history is in many ways the history of big banks in the 20th going into the 21st century.\u00a0 To sum up:<\/p>\n
1.\u00a0 About 25 years ago DEutsche Bank started its transformation from a small German lender to a global investment bank, trading bonds, currencies and commodities (FICC).<\/p>\n
2. DB offered issuing of bonds, hedging of foreign exchange risks to its corporate clients, mostly mid sized colmpanies in Germany.<\/p>\n
3.\u00a0 Gobal markets gave DB a chance to speculate for its own account and DB shares traded at twice the vallue of tangible DB assets.<\/p>\n
4.\u00a0 The outsized FICC business becomes a liability andthe hgiher the ahreof cinome from trading, the lower the share price.<\/p>\n
5.\u00a0 European banks argue that they need a trading floor to serve corporated clients.<\/p>\n
6.\u00a0 Low interest rates and bond market stability make corporate clients less prone to juggle their accounts<\/p>\n
7.\u00a0 All the big banks have been subected to big fines including DB.<\/p>\n
8.\u00a0 Post recession regulation is a big drag on big banks.\u00a0 Rules imposed on domestic lenders in the US will be extended to foreign banks.\u00a0 Regulators in the US have called DB reprorting, “low quality, inacurate, and unreliable.<\/p>\n
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