Rumors: Too Big to Fail Banks on the Brink of Collapse

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Credit Suisse and Deutsche Bank are reportedly on the verge of collapse. They have 2.7 trillion in assets under management between them. It’s three times the assets of Lehman at the time of the collapse.

On 15 September 2008, Lehman Brothers, a bank considered ‘too big to fail,’ filed for insolvency. It was the single largest bankruptcy filing in the history of the US. At the time, the bank had $639 billion in assets and $619 billion in debt.

Credit Suisse and Deutsche Bank are too big to fail. Some say Deutsche Bank will be okay, but Credit Suisse is the one that is in big trouble.

Trading View Engineer Rajat Kumar Singh writes:

If the banks can’t pay off their debts i.e., they become insolvent and have to sell off their assets.

If the prices of these assets fall below a certain level, the other banks too will have to start selling to avoid the forceful margin calls on their positions.

This massive deleveraging event will create a domino effect due to mass selling, and this economic crisis will spread from one market/region to another, known as Contagion.

The German government might move to save Deutsche because it’s the biggest bank in Germany. But the size of the bailout is a matter of concern.

SMH.Au writes:

Credit Suisse’s new chief has asked investors for less than 100 days to deliver a new turnaround strategy. Turbulent markets are making that feel like a long time.

The cost of insuring the firm’s bonds against default climbed about 15 per cent last week to levels not seen since 2009 as the shares touched a new record low. Chief executive officer Ulrich Koerner reassured staff that the bank has a “strong capital base and liquidity position” and told employees that he will be sending them regular updates until the firm announces a new strategic plan on October 27. Koerner said the bank is facing a “critical moment.”

Sweeping changes are coming. Credit Suisse will have to go through a painful restructuring. Deutsche Bank is already delivering and is benefitting from interest rate tailwinds.


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Fed UP
Fed UP
1 month ago

If we had let the “Too Big to Fail” banks fail back in ’08, then we wouldn’t be where we are today. Greed, because people with wealth would rather have their precious wealth than their liberty, were at the root of so much of everything else failing and yet the core problem being bailed out, yet again. This is what happens when those that own the “TBTF” central banking system own & control the governments in the countries in which they operate.

Canadian Friend
1 month ago
Reply to  Fed UP

I cannot comment above ( for some mysterious reason ) so I will post my comment here,

I am no expert, but a quick google search gave me this,

“… U.S. exports to the EU 27 account for 16.3 percent of overall U.S. exports in 2019 …”

If Europe goes trough a severe economic crisis and they buy less of everything that comes from the USA…since the USA sells them 16 % of what they produce, this could make the recession and inflation worse in the USA.

… and of course, in Canada too , since we sell about 80 % of what we produce to the USA …when the USA gets a cold Canada sneezes …( or something like that, it is an old expression)

Daniel
Daniel
1 month ago

This is all because of Dubai. Only Europe would make a vacation land where they arrest you for wearing a bikini on the beach.

GuvGeek
GuvGeek
1 month ago

No Bank, No Business, and No Government is too big to fail. If they are poorly managed and can’t remain solvent or viable, they should fail. Somebody, Somewhere will come along and pick up the pieces that have value. In general, Modern Banks are corrupt money manipulating enterprises anyway because they regulated by Modern Governments which are even more Corrupt!

Peter B. Prange
Peter B. Prange
1 month ago

Stay tuned.