London Daily

Focus on the big picture.
Friday, Jun 20, 2025

Deutsche Bank share slide reignites worries among investors

Deutsche Bank share slide reignites worries among investors

Sharp declines in banking shares in Europe have renewed concerns the panic triggered by the collapse of two US banks and rushed takeover of Swiss giant Credit Suisse may not be easily contained.

Shares in Germany's Deutsche Bank fell by 14% at one point on Friday, with other lenders also seeing big losses.

London's FTSE 100 ended the day down 1.3%, while stock markets in Germany and France dropped even more sharply.

But US fears did not materialise.

After falling early in the day, the Dow Jones Industrial Average gained 0.4% and the S&P 500 rose almost 0.6%, while the Nasdaq ended 0.3% higher.

The rise came despite declines in shares of big banks such as JPMorgan Chase and Morgan Stanley.

In Europe, the banks hit by a sell-off from worried investors included Germany's Commerzbank, which saw shares fall about 5%. France's Societe Generale ended down about 6% while in the UK, Standard Chartered was the biggest faller, down more than 6%.

Deutsche recovered from its steepest losses but still closed more than 8% lower.

Russ Mould, investment director at AJ Bell, told the BBC the drop in Deutsche Bank's share price, and a sharp jump in the cost of insuring against a possible default by the bank, was "indicative of a wider loss of confidence in the banking sector".

"There's a gathering fear that central banks may have overdone it with interest rate increases, having left them too low for too long," he said.

Central banks slashed interest rates during the 2008 global financial crisis and again when the pandemic hit in 2020 as part of efforts to encourage economic growth.

But over the past year or so authorities have been raising rates sharply to try to tame soaring price increases.

These rate rises have hit the value of investments that banks keep some of their money in, and contributed to the bank failures in the US.

Share prices have fallen across the sector, as high-profile investors warn the collapses are symptoms of deeper problems in the system, with other pockets of distress yet to emerge.

Higher interest rates have also raised the possibility of recession, Mr Mould said, and if that happens, "banks will generally find it pretty hard going".

The collapse of Silicon Valley Bank helped to trigger the recent loss of confidence


Central banks and governments have been trying to calm market worries.

German Chancellor Olaf Scholz defended Deutsche Bank at a news conference on Friday, noting that it had "thoroughly reorganised and modernised its business model" and was "very profitable".

Bank of England governor Andrew Bailey also told the BBC that the UK banking system was "safe and sound".

But mixed messages from US authorities as to whether they were prepared to guarantee all bank deposits have led to confusion and hopes that calm had been restored to the sector appear to be have been premature.

US Treasury Secretary Janet Yellen convened an unexpected Friday meeting with regulators on financial stability, while use of an emergency lending programme for banks that the US central bank created this month has increased over the past week, the Federal Reserve reported.

Bloomberg News also reported that UBS and Credit Suisse were being investigated by the US Department of Justice into whether they had helped Russian oligarchs avoid sanctions.

Meanwhile, the financial turmoil sparked by the failures has raised uncertainty about how much higher interest rates might go.

Federal Reserve chairman Jerome Powell said this week the bank may not lift borrowing costs much more, if the banking panic continues to weigh on lending and slows economic growth.

But on Friday St. Louis Fed president James Bullard, who is not currently on the rate-setting committee, said he thought the panic would subside, leading to higher rates than the roughly 5% currently expected.

Joachim Nagel, president of Germany's Bundesbank, said still rampant inflation meant central banks should continue to raise rates.

He declined to comment on Deutsche Bank, but said market turmoil was to be expected after the failures of Silicon Valley Bank and Signature Bank in the US and the UBS takeover of Credit Suisse.

"In the weeks after such interesting events, it is often a bumpy road," he said.

Newsletter

Related Articles

0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
UK Home Secretary Apologizes Over Child Grooming Failures
Trump Organization Launches 5G Mobile Network and Golden Handset
Towcester Hosts 2025 English Greyhound Derby Amid Industry Scrutiny
Gary Oldman and David Beckham Knighted in King's Birthday Honours
Over 30,000 Lightning Strikes Recorded Across UK During Overnight Storms
Princess of Wales Returns to Public Duties at Trooping the Colour
Red Arrows Use Sustainable Fuel in Historic Trooping the Colour Flypast
Former Welsh First Minister Addresses Unionist Concerns Over Irish Language
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
France Bars Israeli Arms Companies from Paris Defense Expo
King Charles Leads Tribute to Air India Crash Victims at Trooping the Colour
Jack Pitchford Embarks on 200-Mile Walk to Support Stem Cell Charity
Surrey Hikers Take on Challenge of Climbing 11 Peaks in a Single Day
UK Deploys RAF Jets to Middle East Amid Israel-Iran Tensions
Two Skydivers Die in 'Tragic Accident' at Devon Airfield
Sainsbury's and Morrisons Accused of Displaying Prohibited Tobacco Ads
UK Launches National Inquiry into Grooming Gangs
Families Seek Closure After Air India Crash
Gold Emerges as Global Safe Haven Amid Uncertainty
Trump Reports $57 Million Earnings from Crypto Venture
Trump's Military Parade Sparks Concerns Over Authoritarianism
Nationwide 'No Kings' Protests Challenge Trump's Leadership
UK Deploys Jets to Middle East Amid Rising Tensions
Trump's Anti-War Stance Tested Amid Israel-Iran Conflict
Germany Holds First Veterans Celebration Since WWII
U.S. Health Secretary Dismisses CDC Vaccine Advisory Committee
Minnesota Lawmaker Melissa Hortman and Husband Killed in Targeted Attack; Senator John Hoffman and Wife Injured
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
×