THE EUROPEAN Central Bank has moved first to protect global financial markets from the potential chaos caused by Deutsche Bank winding down the trading of $1.1 trillion assets on its balance sheet.
The ECB has made Deutsche the first bank under its supervision to report on the cost and consequences of its investment bank's exit from the global markets.
The ECB’s concern stems from the collapse of Lehman Brothers in 2008, and regulators are known to scrutinise large, struggling institutions like Deutsche Bank over their potential to destabilise global markets.
Lehman's sudden and shocking fall intensified the 2008 crisis and wiped $10 trillion from global markets. Although a Deutsche Bank source confirmed to the Financial Times that other Eurozone banks would also be tested, the ECB’s scrutiny comes amid speculation as to the future of Deutsche’s UK-based investment bank...