Deutsche Bank Collapse Risk Grows As Experts Wait for Next 'Domino to Fall'

Deutsche Bank Stock Falls on Contagion Fears

Patricia Kowsmann

Anna Hirtenstein

Investors sparked a selloff in Deutsche Bank AG DB -3.11%decrease; red down pointing triangle and thrust one of Europe’s most important lenders into the center of concerns about the health of the global financial system.

Shares of Germany’s largest lender tumbled as much as 15%, their third consecutive day of losses, though they later regained some ground and closed down 8.5%. The cost to insure against its default using credit-default swaps soared to the highest levels since 2020.

The concern over Deutsche Bank emerged days after Credit Suisse Group AG was forced into a takeoverby its larger and more stable rival UBS Group AG. Since the collapse of Silicon Valley Bank in the U.S. earlier this month, investors have scoured the globe for institutions perceived as vulnerable.

“People want to avoid anything that could come under focus,” said Jon Jonsson, credit portfolio manager at Neuberger Berman.

Deutsche Bank sits at the heart of the German economy. Despite years of retrenchment to make the bank smaller and safer, it remains a globally vital bank, with a major footprint on Wall Street trading bonds, derivatives and currencies. It serves multinational companies with bread-and-butter basics of lending, managing money and corporate accounts.

One factor hammering Deutsche Bank: Mentions of the German bank have exploded on social media in recent days, a bout of activity reminiscent of the social-media frenzy that surrounded Credit Suisse last fall and which that bank’s executives said was partly to blame for its eventual demise.

More...

Deutsche Bank Collapse Risk Grows As Experts Wait for Next 'Domino to Fall'

Katherine Fung

• Deutsche Bank's shares dropped 11 percent on Friday and have now fallen 29 percent since the 2023 banking crisis began, sparking fears of a collapse.
• "Looks like the banking crisis hasn't been entirely put to bed," Chris Beauchamp, chief market analyst at IG Group, told Reuters.
• Despite the worries, German Chancellor Olaf Scholz and other analysts remain optimistic that the bank won't suffer the same fate as Credit Suisse.

Another bank is entering troubled territory amid the recent banking crisis that has spilled into 

global markets—this time in Germany.

Deutsche Bank is facing fears of a collapse after shares dropped 11 percent on Friday morning,

 bringing those stocks down to a total of 29 percent since the bank chaos began on March 8.

"We are still on edge waiting for another domino to fall, and Deutsche is clearly the next one 

on everyone's minds (fairly or unfairly)," Chris Beauchamp, chief market analyst at IG Group, 

told Reuters. "Looks like the banking crisis hasn't been entirely put to bed."

Deutsche Bank's latest slump, driven partly by the Credit Suisse deal, signals that confidence

 in the banking system remains low. It marks the third week of 

decline for European banks, which fell 4.2 percent in the wake of the financial turmoil.

More...