Deutsche Bank Needs a Bail-In, Here’s How It Can Be Done

Deutsche Bank - Guest post from Jonathan Rochford, CFA, Portfolio Manager Narrow Road Capital Pty Ltd

Following the confirmation that hedge funds have started to reduce their capital and trading with Deutsche Bank AG (NYSE:DB) its position is now perilous. It is correct to say that Deutsche Bank doesn’t have a liquidity crisis and that even if it did the Bundesbank could provide it with unlimited liquidity. But liquidity alone doesn’t guarantee a bank can continue to operate in the long term, solvency and profitability are essential as well. Deutsche Bank is at best borderline for both solvency and profitability with little prospect of either improving materially in the medium term. Deutsche Bank needs to substantially restructure...