Deutsche Bank Unexpectedly Found To Have Massive Capital Gap, Larger Than Its Entire Market Cap
German economic research institute ZEW found that Germany's largest bank, Deutsche Bank, had the highest potential capital shortfall, as much as €19 billion in a study of 51 European banks using U.S. Federal Reserve stress test methods. The capital gap is greater than DB's entire market cap.
While it would probably not go bust in a fresh downturn - he predicted the bank which is crucial to the German economy would face serious equity problems. He said: "Putting it short: for a long and serious crisis there simply wouldn't be enough money."
He said: "Turning banks into community property through public funds is not only possible but also necessary. If a bank is no longer able to help itself, the federal government should take on shares and exercise the related control functions."