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Tuesday, 12 July 2016

Deutsche Bank requests €150 billion bailout to EU banks

Alex Christoforou
The Duran


Italy's Prime Minister, Matteo Renzi, fired shots at Germany's financial EU hegemony when, during a joint news conference with Swedish Prime Minister Stefan Lofven, said:
"If this non-performing loan problem is worth one, the question of derivatives at other banks, at big banks, is worth one hundred. This is the ratio: one to one hundred."
Renzi was referring to the massive, trillions of derivatives Deutsche Bank is carrying on its books. According to Renzi, Italy may have issues, but "other" European banks have much bigger problems.

Zerohedge provides context on Italy's banking woes..
In the aftermath of Brexit, much of the investing public's attention has turned to Italian banks which are in desperate need of a bailout as a result of €360 billion in bad loans growing worse by the day (and not a bail-in, as European regulations mandate, as that would lead to an immediate bank run) to avoid a freeze and/or collapse of Italy's banking sector. This has pushed stock prices - and default risk - on Italian banks to record levels. So far Italy's bailout requests have mostly fallen on deaf ears, as Germany's political leaders have resisted Renzi's recurring pleas for a taxpayer funded rescue. However, as we have alleged, and as the Italian Prime Minister admitted last week, the core risk for Europe is not just the Italian banking sector but the biggest bank of all in Europe: Deutsche Bank.
While we are just coming off the roller coaster ride that was the UK referendum, the European Union is about to go through another nausea inducing ride where not one, but two, very big EU players are about to get hammered. The messenger of more bad EU news, David Folkerts-Landau, the chief economist of Deutsche Bank, who has called for a multi-billion dollar bailout for European banks.

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