Deutsche Bank, Credit Suisse, and what to know about the financial turmoil — and how one company is working to boost the number of women on Wall Street (2024)

FAQs

What was the downfall of Deutsche Bank? ›

Scandals and Fines: The Cost of Rapid Growth 🚨

Deutsche Bank faced a series of scandals, including a $7.2 billion settlement for misleading investors and $2.5 billion in fines for rate-rigging. These issues were partly due to its rapid expansion and lack of focus on compliance.

Shakeups of Credit Suisse's board, particularly in the aftermath of the Greensill and Archegos scandals, led to a loss of institutional knowledge at the lender. This left Credit Suisse's board unable to find long-term solutions to its shortcomings, leading to a “poor risk culture” inside the institution.

Owing to the inadequate implementation of its strategic focus areas, repeated scandals and management errors, Credit Suisse lost the confidence of its clients, investors and the markets. The resulting high level of withdrawals of client funds led to the risk of immediate insolvency in mid-March 2023.

Deutsche has a troubled history with regulators and prosecutors. Over the past decade a number of sanctions have been imposed on the bank and it has paid big fines over its failure to crack down on money laundering and over allegations of enabling tax violations, price fixing and foreign bribery.

Deutsche Bank's role in the Second World War, however, is the source of much controversy: according to its own historians, the bank was involved in 363 confiscations of Jewish-owned businesses between 1933, when Adolf Hitler came to power, and 1938.

It looks increasingly inevitable that Deutsche will require some form of rescue, led by the German government and the European Central Bank. The trouble is: that will be a threat to the entire eurozone. To market insiders, the real surprise of today's collapse in confidence in Deutsche Bank is that it took so long.

LONDON/ZURICH, March 15 (Reuters) - A year after the banking crisis that felled Credit Suisse, authorities are still considering how to fix lenders' vulnerabilities - including in Switzerland, where the bank's takeover by rival UBS created a behemoth.

Switzerland faced a full-scale bank run if Credit Suisse went bankrupt, Swiss regulator argues. Allowing the bankruptcy of troubled lender Credit Suisse would have crippled Switzerland's economy and financial center and likely resulted in deposit runs at other banks, Swiss regulator FINMA said Wednesday.

1. What went wrong? Credit Suisse's failings included a criminal conviction for allowing drug dealers to launder money in Bulgaria, entanglement in a Mozambique corruption case, a spying scandal involving a former employee and an executive and a massive leak of client data to the media.

Credit Suisse is one of the biggest financial institutions in the world. It is categorized by the Financial Stability Board, an international body that monitors the financial system, as a “global systemically important bank,” along with just 30 others, including JPMorgan Chase, Bank of America and the Bank of China.

How safe is Credit Suisse? ›

Credit Suisse uses state-​of-the-art systems to ensure your security during an online banking session. These include: Secure login through our SecureSign solution. Strong encryption of data.

On 19 March 2023, Swiss bank UBS Group AG agreed to buy Credit Suisse for CHF 3 billion (US$3.2 billion) in an all-stock deal brokered by the government of Switzerland and the Swiss Financial Market Supervisory Authority.

A Brief Overview of Deutsche Bank's Troubles: Deutsche Bank has been grappling with various issues, from a significant decline in share prices to regulatory fines, investigations, and lawsuits. These challenges have resulted in a loss of investor confidence and triggered a downward spiral for the bank.

Deutsche Bank maintained its momentum in executing on its Global Hausbank strategy during the first quarter. This included: Revenue growth: revenues grew by 1% in the first quarter of 2024, as 11% year on year growth in commissions and fee income more than offset lower net interest income as interest rates stabilized.

Large investments have improved anti-financial crime controls since 2019, but we believe that Deutsche Bank's business model is intrinsically exposed to these risks. At the same time, the bank has a good record of managing credit and counterparty risk in most businesses.

Political uncertainties prompted investors to withdraw their funds from Germany to beat the expected depreciation of the mark or imposition of exchange controls (in a classic currency crisis); this meant liquidating their mark deposits, in turn undermining the position of the banks.

spying scandal in the Deutsche Bank. The management's personal interest in spying. Deutsche bank was not only monitoring on its employees but also the outside investors. thousands of email of employees, but also secretly searched their computer hard drives.

FRANKFURT, April 29 (Reuters) - Deutsche Bank (DBKGn.DE) , opens new tab shares were down 9% on Monday after news that a long-running lawsuit claiming it underpaid for its purchase of its giant Postbank division could cost up to 1.3 billion euros ($1.39 billion).

Deutsche Bank, which agreed in 2017 to pay a $7.2 billion fine to the U.S. for its “irresponsible lending practices” in 2006 and 2007 that partially caused the Great Recession, managed to navigate through that controversy by dramatically cutting costs, cutting roughly 20% of its global workforce in a single day in 2018 ...