A Credit Suisse derivatives chain reaction blowout was averted two weeks ago with a $270-plus billion bailout operation orchestrated by the Swiss National Bank—backstopped by the Fed. Even though the smoke hasn’t cleared yet on that one, Deutsche Bank is now in the barrel with a lot of noise in “the market” about their solvency—and they have a bigger, nastier derivatives “tick” than CS had.
Compared to CS’s $16 trillion in derivatives and $574 billion in assets (a 28:1 ratio), DB has a cool $46 trillion in derivatives and $1.434 trillion in assets (a 32:1 ratio). Only JPMorgan and Goldman Sachs have greater derivatives exposure than Deutsche Bank.
An article in the March 26 “Seeking Alpha” reflected the quiet panic on Wall Street, with the following summary of its own article:
