Deutsche Bank Under Attack, Again
As if last week’s $14-billion claim from U.S. authorities wasn’t enough, confidence in Deutsche Bank has been hit this week by a warning from a U.S. watchdog that it’s far more fragile than its competitors.
Germany’s largest and most troubled bank received more bad news this week when U.S. Federal Deposit Insurance Corp. Vice Chairman Thomas Hoenig released figures on the leverage of the world’s biggest banks, reflecting the stability of the financial system.
The data showed that Deutsche Bank has a far thinner cushion than other banks if a crisis arises — only half as thick, in fact, as the average of its competitors in the United States and the rest of the world.
According to Mr. Hoenig’s calculations, the bank has a leverage ratio — capital against assets — of just 2.68 percent. The ratio is seen as a key benchmark for gauging a bank’s resilience to shocks. Deutsche Bank itself says it has a leverage ratio of 3.4 percent.