The Sovereign Doom Loop: Deutsche Bank AG Edition

Karen Shaw Petrou’s memorandum to the Federal Financial Analytics clients  on “The Sovereign Doom Loop: Deutsche Bank Edition.”

TO: Federal Financial Analytics Clients

FROM: Karen Shaw Petrou

DATE: September 30, 2016

The Sovereign Doom Loop: Deutsche Bank Edition

Earlier this week, The Wall Street Journal blamed Deutsche Bank’s problems on the Justice Department’s belated efforts to show that it can be tough on big banks. It might better have blamed the problem on German officials who side-tracked Eurozone efforts to craft an effective, practical resolution regime in their efforts to make it not just one that ensured resolution, but also revenge. At the same time, Germany fought stringent stress tests and some of the other standards that have worked so well in the U.S. Had...