Mohamed A. El-Erian , Columnist

What Deutsche Bank Is Telling Investors in Europe

Germany's largest institution isn't the only one battling headwinds.

September 29, 2016 at 6:00 AM UTC

Mohamed A. El-Erian is a Bloomberg Opinion columnist. A former chief executive officer of Pimco, he is president of Queens’ College, Cambridge; chief economic adviser at Allianz SE; and chair of Gramercy Fund Management. He is author of “The Only Game in Town.”

Test case.
Photographer: Krisztian Bocsi/Bloomberg

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Shares of Deutsche Bank, Germany’s largest bank, have lost more than half their value in the last year, and have been subject to exceptional volatility. Its bonds have also had a rough ride.

The decline is fueling lots of speculation about the adequacy of the bank’s capital cushion, its strategic positioning, the need to dispose of non-core units and its relations with the German government. More generally, the bank’s struggles hold important lessons for investors in the European banking sector, as some institutions continue to struggle to overcome the legacy of the global financial crisis.