International Business & Economy Potential collapse of Deutsche Bank could trigger an economic catastrophe

Potential collapse of Deutsche Bank could trigger an economic catastrophe

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By: Frank Doe

And so it seems that Angela Merkel, the Chancellor of Germany and the de facto leader of the European Union, is running into deeper troubles than she could imagine.

Her statement made on the 20th September 2016 at a news conference in Berlin, admitting regrets over Germany’s liberal immigration policies saying, “If I could, I would turn back the time many, many years”, this would not have spared her the imminent crisis of monumental proportion.

Over the past three days this week, the survival of Deutsche Bank, Germany’s national bank, comes into question as the bank hangs precariously on the balance.

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It spelled doom for Deutsche Bank when its largest lender, the Qatar Royal Family, who was involved in bond deals just last week with the bank, “pulls plug on future equity” and expressed “concerns over the bank’s long term strategy”.

“Analysts say this could be the final nail in the coffin for the bank which was accused of using stealth methods to woo investors” this week by hiding risks amid bond offerings.

The potential collapse of Deutsche Bank could trigger an economic catastrophe in the EU with the bank’s holdings worth two thirds of the entire German economy and the contagion could well spread worldwide putting the global banking system in jeopardy.

There is no time for bondholders and the UK in particular “to be catching falling knives” based on wishful thinking instead of rational economic understanding, as UK hasten its negotiations on the terms of BREXIT.

This could well trigger the dissolution of the rest of the European Union.

The worst is yet to be.

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