Max Keiser hit out against Deutsche Bank in the latest episode of his RT
program Keiser Report, saying the bank was “technically insolvent”
despite assurances from German Finance Minister Wolfgang Schaeuble that
he had “no concerns” over his country’s biggest bank.
Deutsche Bank shares are down 40 percent since the beginning of the
year, falling below their price at the time of the 2008 financial
crisis. The bank suffered record losses of €6.8 billion in 2015.
a balance sheet now eclipsing JP Morgan’s, Keiser warned that the bank
will sooner or later have to admit to insolvency and say “we need either a huge bailout or we gotta close up shop.”
German Finance Minister Wolfgang Schaeuble dismissed concerns over
Germany’s biggest lender, telling Bloomberg he was not worried about its
Deutsche Bank CEO John Cryan also played down the concerns in a published letter to staff on February 9, describing the bank as “absolutely rock-solid” and “strong”. “On
Monday, we took advantage of this strength to reassure the market of
our capacity and commitment to pay coupons to investors who hold our
Additional Tier 1 capital,” Cryan wrote. “This type of
instrument has been the subject of recent market concern. The market
also expressed some concern about the adequacy of our legal provisions
but I don’t share that concern. We will almost certainly have to add to
our legal provisions this year but this is already accounted for in our
The bank’s contingent convertible (CoCo)
bonds also plunged in value this year. CoCo bonds are designed to be
converted to equity when the bank gets into trouble. They have no
maturity date and come with no promise to investors that they will get
their money back.
payments on the bond are contingent on the bank’s ability to keep its
capital above certain thresholds. If the bank does not make a coupon
payment, investors cannot call for a default.
Deutsche Bank said
last week that they would likely be able to make its coupon payment for
2016, after telling investors last month that it couldn’t make its 2015
Keiser described the move as a ponzi scheme saying, “You can’t just miss coupon payments. It’s called insolvency.”