Deutshe Bank



Epping said:
surely the German government would break Eu law and intervene
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The Italians are on standby to break state aid rules, the Germans will do exactly the same.

Another nail in the coffin of the EU, as the state aid rules is an EU thing, you should be able to do what is right for your country no matter what.
 
Before anything goes wrong with the Krauts the Italian banks are having stress tests done right now. The results are going to be published on Friday after the markets close and one bank (at least), Monte dei Paschi di Siena, is likely to fail and need life support. If/when they do fail it's going to transmit a lot of stress to other Italian and EU banks. Italy doesn't have enough rescue funds available and the EU won't relax their ridiculous bail in law which would set off a chain of dominoes in Italy if they have to do it. The Italian government are trying to cobble together a private sector solution but it's not looking too clever. If things get out of control the contagion isn't going to stop at the border, it's going to head right to Deutsche and the big French banks.

There's a chance they fudge the stress tests to kick the can down the road (there's a referendum in October in Italy and they'd like to get past that at least) but events may overtake them before then. If things do blow up there's going to be a huge panic and volatility. I'm guessing the ECB have some sort of euroTARP programme ready to go to prevent another Lehman situation but who the hell knows with these idiots. We could be looking at another meltdown next week if the stress tests are done honestly and things blow up without the ECB coming to the rescue.
 
Chocolate Fireguard said:
Before anything goes wrong with the Krauts the Italian banks are having stress tests done right now. The results are going to be published on Friday after the markets close and one bank (at least), Monte dei Paschi di Siena, is likely to fail and need life support. If/when they do fail it's going to transmit a lot of stress to other Italian and EU banks. Italy doesn't have enough rescue funds available and the EU won't relax their ridiculous bail in law which would set off a chain of dominoes in Italy if they have to do it. The Italian government are trying to cobble together a private sector solution but it's not looking too clever. If things get out of control the contagion isn't going to stop at the border, it's going to head right to Deutsche and the big French banks.

There's a chance they fudge the stress tests to kick the can down the road (there's a referendum in October in Italy and they'd like to get past that at least) but events may overtake them before then. If things do blow up there's going to be a huge panic and volatility. I'm guessing the ECB have some sort of euroTARP programme ready to go to prevent another Lehman situation but who the hell knows with these idiots. We could be looking at another meltdown next week if the stress tests are done honestly and things blow up without the ECB coming to the rescue.
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They don't need a tarp because excess liquidity is as high as it's ever been. There might be some money market stress but it will be contained. The issue with Italy is that many bondholders of Italian banks who would be subject to bail in are households.

I'd only expect liquidity issues if db went bang.
 

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