from Wolf Street:
Schäuble tries to soothe nerves, but the plunge gets worse.
Shares of Deutsche Bank have plunged 57% since July 31, to a new 30-year low today of €13.71. Since the beginning of the year, they lost 38%. Credit Suisse plunged 8.3% today to CHF 13.01, down 53% since July 31. Other European banks got mauled too.
The Stoxx 600 Europe Banks index dropped to the lowest level since the gloomy days of the Eurozone debt crisis in 2012. At the time, Draghi’s whatever-it-takes pledge kicked off a bank rally. When it petered out, Draghi came up with negative deposit rates and QE, which in early 2015 kicked off another bank rally. But it all came unglued around July 31. Since that propitious date, the index has plunged 40%.
Yet among the big banks, Deutsche Bank is the trailblazer. And they’re all trying to prop it up in a concerted effort that is eerily reminiscent of the efforts during the early stages of the Financial Crisis. The reassurances have now ascended to Finance Minister Wolfgang Schäuble. When Deutsche Bank is under attack, everyone’s got to stick together.
“No, I have no concerns about Deutsche Bank,” he told Bloomberg TV on Tuesday without further elaborating, after a meeting in Paris of French and German finance gurus, where they’d probably discussed how to deal with the sprouting banking crisis.
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