This is about the time before we experience the banking crisis at Deutsche Bank, a financial institution that has endured years of mismanagement and vulnerability, although it is now argued that it is due only to the stock market crash. crisis confidence Doubts about this bank dragged on the European banks “Black Friday” after shares fell more than 14%, partially corrected later, and revived concerns about the health of the financial system. The concern does not end after the Credit Suisse crisis and its forced takeover by UBS and US Regional Bank. The credit default insurance (CDS) at Germany’s largest bank ran on Friday and the losses spread like wildfire across the industry without exception.
The first reaction of the monetary and government authorities was to strengthen the strength of the European financial system. But the panic that the disturbances have not disappeared, the new economic convulsion of Frankfurt is beginning to be more and more present.
After many years of scandals (finally 2,500 million dollars in 2015 for participating in the manipulation of the Libor index or the reference rate of the London interbank market; in 2018 the EU asked him to be part of a cartel in the secondary market of the sovereign. opened an investigation into the manipulation of the secondary public debt market in the negotiation of bonds in cash between 2005 and 2016…), Deutsche Bank offers little. Confidence and frequent questions were not answered despite the fact that last year it had a profit of 5,000 million cash. The capitalization of German banks continues to fall and has lost a quarter of its value on the stock market this year alone.
After Credit Suisse Hospitality, the next one was Deutsche Bank and this was confirmed. The countries’ own standards, bad practices and capitalization by investors from the Persian Gulf have led their shares to a continuous loss of value.
Great systemic economic crises always require the support of States for their solution
Confidence problems in banks are increasing again as European leaders want to send a message of calm to the financial markets. The insecurity became even more acute with the high-speed collapse of these two currencies after the US disaster. On Friday, all the indicators showed the fear of the beginning of a new chapter of the banking crisis. An environment of great global uncertainty turns any significant event, such as the aforementioned banking crisis, into something that can generate a financial crisis that pulls the entire system.
What we are looking at these days is the credit quality of the financial system, at the same time that interest rates are rising in an environment of financial turmoil and the outlook for stagflation is not rosy.
Western capitalism is restored. Citizens’ hatred and anger with politics and the economy contribute much to the problems that have been generated by deregulation and free markets in recent decades. In the last fifteen years the model has shown clear signs of fatigue. At a time when the great movements of the world market are conditioned by a few financial institutions and a number of large investment funds, which, according to their decisions and preferences, move prices in one or another and in one or another market. conditions such as the present are inevitable.
The concentration of wealth in a few hands, to the extent that it increases day by day, reduces the scope of the effective economic freedom of our societies. When this is reduced, true political freedom is also reduced. When economic life is controlled by a few, those few also dominate politics and impose political conditions. That being the case, great systemic crises in the financial world will always count for the support of the States in which they made their solution.
