After Silicon Valley Bank became the second largest bank of all time to fail, investors and analysts around the world have been ringing alarm bells. Some fear the entire banking system is still at risk, but many believe the Treasury Department’s decision to bail out depositors was enough to solve the problem.
The crisis has raised concerns about the stability of all major banks, but Deutsche Bank, one of the largest and most vetted financial institutions in the world, worries investors more than others. Even at the beginning of the most recent banking crisis, Deutsche Bank was not in the best of shape.
The German banking giant has faced numerous challenges in recent years, with its share price falling about 30% in less than two months. Despite a small rebound of late, investors remain skeptical about the bank’s future prospects. In addition, Deutsche Bank’s interconnectedness with other financial institutions increases the potential for a domino effect should it encounter major liquidity problems.
Deutsche Bank has struggled to regain its footing amid various scandals in recent years. The worst of the recent scandals was his Connections to Jeffery Epstein and his failure to prevent his millions of dollars in suspicious transactions despite knowing his criminal record and playing an important role in his financial dealings.
The bank was fined $150 million by the New York Treasury Department for the Epstein scandal, as well as a separate failure to expose money laundering by two European banks with which it worked closely. The Federal Reserve has too warned Deutsche Bank several times that its methods of preventing money laundering in the US are inadequate. Deutsche Bank says it’s addressing these issues, but it will likely take a long way to recovery and it’s unclear if the effort will be successful.
Investors are concerned about the bank’s vulnerability to external shocks, such as B. more bank runs or a persistently restrictive Fed. The global financial system is closely monitoring Deutsche Bank’s situation as its failure could have far-reaching consequences. Regulators and policymakers are keeping a close eye on the institution to prevent a possible global crisis.
Even if the bailout eliminated that particular contagion, there’s no reason why this situation couldn’t repeat itself if nothing changes in US banking regulation or supervision. Americans are increasingly distrustful of large banks and financial institutions. After the real estate crisis in 2008, the Gamestop short press in 2021, the exponential rise of digital currencies to bypass banks and the current banking crisis, big banks are only seen as enemies by many.
As confidence in banks falls, investors look to protect their portfolios with gold and silver. Gold and silver prices soared after news broke of Silicon Valley Bank’s plight. One of the best things about investing in gold and silver is that you don’t have to trust anyone. You can keep it in your safe at home and not worry about losing everything because your bank messed up. Precious metals are also some of the only assets that have been highly valued around the world for thousands of years.
Investors are flocking to gold and silver to protect their portfolios as economic uncertainty mounts. Cash Gasoline gas precious metal center master the sector and discover the best trading platforms for precious metals.
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This article Will Deutsche Bank be the next to go under? Concerned investors are already turning to gold originally appeared on Benzinga.com
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Source : finance.yahoo.com