Deutsche Bank may create 'bad bank' for high-risk assets

https://www.dw.com/en/deutsche-bank-may-create-bad-bank-for-high-risk-assets/a-49231290

Deutsche Bank may create 'bad bank' for high-risk assets

Date 17.06.2019
Author Lewis Sanders IV

Deutsche Bank has put forward plans to overhaul its trading operations by creating a so-called bad bank that would hold up to €50 billion ($56 billion) in assets, reported the London-based business newspaper Financial Times on Monday.

A bad bank allows financial institutions to isolate high-risk assets. In this case, it would allow Deutsche Bank to house or sell high-risk assets, mostly long-dated derivatives, as it shifts its operations towards more profitable enterprises.

The measure would be complemented by a new focus on transaction banking and private wealth management, according to the newspaper. That would include scaling back or shuttering some of its business outside Europe, which could significantly impact its presence in the US.

Deutsche Bank chief executive Christian Sewing could announce the measures in late July.
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