Deutsche Bank Poses Greatest Risk to Financial System, IMF Says -- 2nd Update
June 30 2016 - 3:20AM
Dow Jones News
By Hans Bentzien
FRANKFURT--Deutsche Bank AG is the riskiest financial
institution in the world as a potential source of external shocks
to the financial system, according to the International Monetary
Fund.
"Among the G-SIBs (globally systemically important banks),
Deutsche Bank appears to be the most important net contributor to
systemic risks, followed by HSBC and Credit Suisse," the IMF said
in its Financial Sector Assessment Program.
The news came just after the Federal Reserve said U.S. units of
Deutsche Bank and Spain's Banco Santander SA were the only ones
among 33 banks that failed the final round of its "stress test,"
conducted to gauge how they would fare in a new financial
crisis.
The IMF also said the German banking system poses a higher
degree of possible outward contagion compared with the risks it
poses internally.
"In particular, Germany, France, the U.K. and the U.S. have the
highest degree of outward spillovers as measured by the average
percentage of capital loss of other banking systems due to banking
sector shock in the source country," the IMF added.
The importance of Deutsche Bank emphasizes the need for risk
management, intense supervision and monitoring cross-border
exposure as well as the ability of globally systemic banks to carry
out new resolution regimes, the IMF said.
A Deutsche Bank spokesman declined to comment on the IMF
assessment.
Germany needs to examine whether its resolution plans for banks
are operable, including a timely valuation of assets to be
transferred, continued access to financial market infrastructures,
and whether authorities can ensure control over a bank if
resolution actions take a few days, if needed, by imposing a
moratorium, the IMF said.
Friedrich Geiger contributed to this article.
Write to Hans Bentzien at hans.bentzien@wsj.com
(END) Dow Jones Newswires
June 30, 2016 03:05 ET (07:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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