Yesterday’s desperate scramble by Deutsche Bank to comfort markets about its liquidity position worked, for about three hours. And then, the bank which really should just keep its mouth shut, did the opposite and reminded an already panicked market just how “serious” things are, in the parlance of Jean-Claude Junkcer, when in an internal memo, the CEO assured his workers that:
- DEUTSCHE BANK CEO: CAP STRENGTH, RISK POSITIONS ’ROCK SOLID’
That was the good news. The bad news:
- DEUTSCHE BANK TO INFORM STAFF IN COMING WEEKS ABOUT COST CUTS
More details from Bloomberg:
Deutsche Bank AG is “absolutely rock-solid,” Co-Chief Executive Officer John Cryan wrote in a letter to employees, seeking to reassure markets after a plunge in the shares.
Cryan said he isn’t concerned about the Frankfurt-based lender’s ability to meet legal costs, he wrote in the memo published on Tuesday. While Deutsche Bank will “almost certainly” have to add to its provisions for legal costs this year, the firm has already accounted for it in its financial planning, according to Cryan.
“I am personally investing time to resolve successfully and speedily open regulatory and legal cases,” he wrote. “I want to remove the uncertainty among staff and in the market that these cases cause. A small group of senior people, led by me, will focus on this. For everyone else, we ask you to continue to focus on our clients and on the implementation of our strategy.”
Or, said otherwise, “Deutsche Bank is fine.”
However, with numerous analogies being made between the German bank with the soaring default risk and Lehman or at least Bear, that may have been the absolutely worst thing for the bank to note at a time when the market is perfectly happy to interpret any assurance of ongoing solvency and viability as a desperate attempt to boost confidence, and resume selling the stock and buying even more default protection, which is what it has done, and as of last check DB stock just turned negative in German trading.
via Zero Hedge http://ift.tt/1KCEtYE Tyler Durden