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Germany Seeks to Avert VTB Unit’s Collapse in Russia Fallout

  • Authorities are working to avoid triggering deposit insurance
  • VTB under pressure after Sberbank Europe failure last week

German authorities are stepping up scrutiny of VTB Bank PJSC’s European operations as they seek to avoid triggering the deposit insurance scheme that could represent a multi-billion-dollar upfront hit to other banks in the nation.

The Russian lender, with European operations headquartered in Frankfurt, is being monitored by the German central bank, the financial markets regulator and deposit insurance bodies, people with knowledge of the matter said. Authorities are trying to find a solution that avoids an automatic triggering of payouts to clients, while still bracing for a potential wind-down, said the people, who asked to remain anonymous as the matter is private.