If Angela Merkel won't bail out Deutsche Bank, who will? If you understand the concept of "Too Big to Fail" the question isn't whether Deutche Bank will be bailed out or not. The only question is "Who will Bail out Deutsche bank?" Because when one Too big to fail bank fails it likely will cause a ripple effect of other bank failures too because banks have agreements and business dealings that ripple through some or all banking systems. So, for one too big banking system to fail it means others are likely to as well.
So, once again who is going to bail out Deutsche bank to prevent a worldwide calamity of banks failing?
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- 1 hour ago ... FRANKFURT (Reuters) - German Chancellor Angela Merkel cannot afford to bail out Deutsche Bank given the hard line Berlin has taken ...
- 3 days ago ... German Chancellor Angela Merkel sought this week to keep a low profile on the public debate ... Photo: Zuma Press ... Deutsche Bank's shares ended Tuesday unchanged at €10.55 ... Photo: KAI PFAFFENBACH/REUTERS.
- 1 day ago ... Germany will not help ailing lenders such as Deutsche Bank as ... by; Reuters ... Germany will not help ailing lenders such as Deutsche Bank DB 14.98% , a senior lawmaker in Chancellor Angela Merkel's ... radio: “I cannot imagine that the state will repeat something like that. ... “We will have to figure it out.
Germany's Merkel cannot afford to bail out Deutsche Bank: media
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German Chancellor Angela Merkel arrives to sign a book of
condolence for former Israeli President Shimon Peres at the embassy of
Israel in Berlin, Germany, September 30, 2016. REUTERS/Michael
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By Georgina Prodhan
FRANKFURT (Reuters) - German Chancellor Angela Merkel cannot afford to bail out Deutsche Bank given the hard line Berlin has taken against state aid in other European nations and the risk of a political backlash at home, German media wrote on Saturday.
The government denied a newspaper report on Wednesday that it was working on a rescue plan for Germany's biggest bank, as its shares went into a tailspin fueled by a demand for up to $14 billion from U.S. authorities for misselling mortgage-backed securities before the financial crisis.
Germany, which has insisted Italy and others accept tough conditions in tackling their problem lenders, can ill afford to be seen to go soft on its flagship bank, the Frankfurter Allgemeine wrote.
"Of course Chancellor Merkel doesn't want to give Deutsche Bank any state aid," it wrote in a front-page editorial. "She cannot afford it from the point of view of foreign policy because Berlin is taking a hard line in the Italian bank rescue."
The Munich-based Sueddeutsche Zeitung wrote that Merkel would be breaking a promise to taxpayers if she were to bail the bank out, which could spell disaster for her re-election bid next year as the anti-immigration AfD party gains ground.
The AfD is already benefiting from a backlash against Merkel's open-door refugee policy, making huge gains in two regional elections last month and hitting an all-time high of 16 percent support in an opinion poll last week.
"A state aid package would drive voters into the arms of the AfD," the Sueddeutsche wrote in an editorial.
"Domestic political considerations make it unlikely that Berlin would play this joker. Even more unlikely is that the European Commission would agree. The political risk would be simply too high."
Shares in Deutsche Bank recovered somewhat on Friday from a record low early in the day after a report that it was close to a cut-price settlement of $5.4 billion instead of $14 billion.
The bank, the U.S. Department of Justice and the German finance ministry all declined to comment on the report.
The crisis also prompted Deutsche Bank's normally reticent Chief Executive John Cryan to publish a letter seeking to reassure staff the bank was stable and hitting out at "forces" that wanted to weaken trust in the bank.
The Stuttgarter Zeitung wrote on Saturday: "Deutsche Bank has to win back ground here because as exaggerated as the reports of an existential danger to the bank may have been, just as obvious are its continuing difficulties."
"Trust is a bank's most important currency."
(Editing by David Clarke)
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