Are We Facing Another 2008 Financial Crisis?

© Kai Pfaffenbach / Reuters

RT: Deutsche Bank woes stoking fears of 2008 financial crisis repeat

Europe’s biggest lender Deutsche Bank has lost more than half of its value since January, posing a threat to the stability of other banks across the continent. Some analysts are worried it could invoke a large-scale crisis, bigger than in 2008.

After a massive sell-off on Monday, Deutsche Bank’s market value shrank to €14.5 billion. In dollar terms it is only $2 billion more than the $14 billion penalty the bank faces from the United States Department of Justice over its mortgage-backed securities business before the 2008 global crisis.

Deutsche's problems have raised questions about the health of other big European lenders. The share price of the Royal Bank of Scotland has plunged 13 percent and Italy’s UniCredit is down 12 percent this month. The Bloomberg Europe 500 Banks and Financial Services Index is down 4.2 percent for September. This is the worst result since June, when the Brexit referendum heavily hit the markets.

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WNU Editor: There is confusion on what the German government is going to do .... Germany 'prepares Deutsche Bank rescue' (BBC) .... or this .... Germany denies preparing Deutsche Bank rescue plan (Reuters). But one thing is certain .... German Chancellor Angela Merkel is racing reelection next year, and this crisis will definitely kill her chances of being re-elected.

Update: A small reprieve (maybe) .... Deutsche Bank is rallying off record lows for a whole bunch of reasons (CNBC).