The Banking and Strategy Initiative

Chillin' out till it needs to be funded

Deutsche Bank says ECB LTRO creates a blight

Deutsche Bank has come out publicly against the ECB loan festival opening EUR 489 bln worth of collateral free loans. ECB is planning to increase the facility to nearer EUR 1.5 Tln within this month as banks have used up the loans to repay obligations due in May and market may again face a liquidity crunch.

Deutsche  Bank  had not participated in December unlike 523 other banks and outgoing CEO Josef Ackerman said the bank “did not want to be seen as seeking help “

Even as IIF is staring at a 20% valuation on NPV of its investors’ Greek holdings including Deutsche Bank’s Postbank which has till now written off EUR 335 mln, the ECB’s new chief Mario Draghi has been reasonably satisfied with the banks response to the first tranche till now,  hoping to unfreeze a large amount of bank assets with the loans and irritated by talks about caps for EFSF and the new EUR 650 bln ESM voting qfor another assessment on adequacy of liquidity by March

Deutsche Bank used EUR 550 mln in deferred tax credits to post a Q4 profit. ECB has also reduced the REquired reserves by half from 2% to 1% releasing EUR 100 mln even as banks find ECB deposits safer than lending

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