Aaron Brown, Columnist

Deutsche Bank's Future Is More Fannie Mae Than Lehman

The lender is probably more important to the German economy than the GSEs were to the U.S.

June 6, 2018 at 6:00 AM UTC

Aaron Brown is a former head of financial market research at AQR Capital Management. He is also an active crypto investor, and has venture capital investments and advisory ties with crypto firms. He is the author of the soon-to-be-released "Wrong Number."

Pedestrians walk past a sign at the Deutsche Bank Place building in Sydney, Australia, on Friday, June 1, 2018. Australia's banking industry faces an unprecedented criminal prosecution as Australia & New Zealand Banking Group Ltd. and two of its underwriters, Deutsche Bank and Citigroup Inc., brace for cartel charges over a A$2.5 billion ($1.9 billion) share sale.Photographer: Bloomberg/Bloomberg

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It's hard to recall the last time there was good news out of Deutsche Bank AG. Record fines and criminal charges. Restructuring plans with layoffs and write-offs, that don't seem to work. Losses. Senior management infighting. Credit-rating downgrades and new lows for the stock price. Added to a U.S. list of troubled lenders.1 Only three of the 33 equity analysts following the German lender are positive on the stock, according to data compiled by Bloomberg.

It's no wonder that there's a heightened fear that some bad event will completely destroy faith in Deutsche Bank, leading to its collapse and a 2008-style financial crisis, just as Lehman Brothers Holdings Inc.'s bankruptcy ignited a global financial conflagration.3