Hard on the heels of the news that Barclays bank has taken 2 emergency central bank loans exceeding £1.6bn, Deutsche Bank has shut down its proprietary credit trading desk in
London and is laying off some of the 14-strong team, a source familiar
with the matter said on Friday.
Earlier last month a source close to Deutsche Bank told Reuters the
bank was set to ditch its credit relative-value trading strategy used
by the London proprietary trading desk after losses of about $US135
The chief executive of Deutsche Bank, Germany's biggest bank, says GLOBAL economic growth will take a hit as a result of the US subprime mortgage crisis.
“Growth, especially of private consumption in the United States,
will suffer because of the housing crisis and that can naturally not go
without negatively affecting the world economy overall,” Josef
Ackermann said in a column to be published in the German business daily
Mr Ackermann said many banks and investors affected by the credit
market turmoil that arose in the wake of the sub-prime crisis had
apparently taken risks that exceeded their size and risk-bearing
“This is, to say it clearly, above all negligence on the part of the managements of these houses,” he said.
The distribution of credit risks in the international financial
system had not been transparent to supervisory authorities and market
participants, he said.
Deutsche Bank has declined to comment.