Deutsche Bank, UBS hit as bank fears spark stress signals - Scholz says EU banks are stable
Record ID:
1717167
Deutsche Bank, UBS hit as bank fears spark stress signals - Scholz says EU banks are stable
- Title: Deutsche Bank, UBS hit as bank fears spark stress signals - Scholz says EU banks are stable
- Date: 24th March 2023
- Summary: FRANKFURT, GERMANY (FILE - FEBRUARY 3, 2021) (REUTERS) VARIOUS OF DEUTSCHE BANK BUILDING AND LOGO
- Embargoed: 7th April 2023 14:40
- Keywords: Banking crisis Credit Suisse Deutsche Bank European Central Bank Olaf Scholz UBS
- Location: FRANKFURT, GERMANY / BRUSSELS, BELGIUM / ZURICH, SWITZERLAND
- City: FRANKFURT, GERMANY / BRUSSELS, BELGIUM / ZURICH, SWITZERLAND
- Country: Germany
- Topics: Company News Markets,Europe,Economic Events
- Reuters ID: LVA002001524032023RP1
- Aspect Ratio: 16:9
- Story Text: European banking stocks fell sharply on Friday (March 24), with Deutsche Bank and UBS knocked by worries that actions by regulators and central banks have not yet contained the worst problems to face the sector since the 2008 global financial crisis.
Financial market stress indicators were also again flashing warning signs more widely, with the euro falling against the dollar and bond yields sinking.
Deutsche Bank shares fell for a third day, dropping more than 12% after a sharp jump in the cost of insuring its bonds against the risk of default.
German Chancellor Olaf Scholz who was in Brussels for an EU summit was quick to jump to the bank's defence.
Deutsche Bank is a very profitable bank and there is no reason to doubt its future, Scholz said on Friday in response to the sharp fall in the bank's share price.
"Deutsche Bank has thoroughly reorganised and modernised its business model and is a very profitable bank," the German chancellor said at a news conference in Brussels.
Shares in Germany's largest bank have lost a fifth of their value so far this month.
Deutsche Bank declined to comment.
The global banking sector has been rocked since the sudden collapse this month of SVB and Signature Bank.
Policymakers have stressed the turmoil is different from the global financial crisis 15 years ago, saying banks are better capitalised and funds more easily available.
But the worries spread quickly, and on Sunday UBS was rushed into taking over Swiss rival Credit Suisse after it lost the confidence of investors.
Swiss authorities and UBS are racing to close the takeover within as little as a month, according to two sources with knowledge of the plans.
UBS shares were down 7% on Friday and its five-year CDS shot up 14 basis points.
(Production: Tanya Wood) - Copyright Holder: FILE REUTERS (CAN SELL)
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