Opaque Assets at Europe Investment Banks Fuel Capital Doubts
- Deutsche Bank holds most Level 3 trading assets, derivatives
- Investors should be ‘more circumspect’ on values, analyst says
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Eight years after the financial crisis, Europe’s biggest investment banks are holding illiquid assets amounting to more than half their combined shareholders’ equity, underlining concerns about capital.
Deutsche Bank AG, Credit Suisse Group AG and Barclays Plc say their hardest-to-value securities -- known as Level 3 assets -- were worth $102.5 billion at the end of June. These include investments that gained notoriety in the financial crisis, from bespoke credit derivatives to mortgage-backed bonds.