The shocking amount that the DoJ is ordering Deutsche Bank to pay could have severe effects on the German company’s future.
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The U.S. Department of Justice has fined the German lender $14 billion to settle claims over a mortgage securities probe.
Other European banks fell as well. The uncertainty that has returned to global financial markets comes as central banks signal they are rethinking their approach to the monetary stimulus that’s bolstered assets from stocks to bonds for the past half decade.
Investors also remained in a cautious mood ahead of the Bank of Japan and Federal Reserve policy meetings next week.
US consumer prices edged up 0.2 percent in August as a surge in medical care offset flat readings for food and energy.
London’s benchmark FTSE 100 index ended the week slipping 0.3 percent. Dow components Goldman Sachs and JPMorgan fell 0.9 percent each.
Deutsche’s shares were down 8.1 percent at 12.04 euros in afternoon trading in Europe.
WALL STREET: U.S. stocks climbed Thursday as Apple led a big gain for technology companies and energy companies recovered some of their recent losses.
On news of the filing today, Deutsche was quick to respond that it had no intention to settle these potential claims anywhere near that figure. On the Nasdaq, 1,452 issues fell and 830 advanced. French lenders BNP Paripas and Societe Generale both fell over 2%.
Top losers in the STOXX 600 were Portugal’s BCP and Italy’s Monte dei Paschi di Siena BMPS, MI , with both banks down more than 9 percent. Among those were Commerzbank, which was down 3 percent and Royal Bank of Scotland, which fell by 5.3 percent. Standard Chartered also finished down by 2.74 percent.
Another strong performer was Chariot Oil And Gas, whose shares are up by 17.42 percent.
The moves weighed on the German and United Kingdom benchmarks.
Consumer goods giant Unilever finished lower by 0.85 percent on reports that it is in talks to buy Honest Co., the consumer-products retailer co-founded by actress Jessica Alba, in a deal valued at over $1 billion. Hourly labor costs increased 1 percent year-on-year, slower than the 1.6 percent growth registered a quarter ago. Analysts had expected Deutsche’s penalty to be at the bottom of that range, or even below it. Deutsche, which settled for $1.9 billion with the FHFA in 2013, is indeed likely to pay much less than $14 billion for the sins of its swaggering pomp; but it can ill afford a bigger bill than it bargained for. The CBOE market-volatility index, Wall Street’s “fear gauge”, declined 5.7 per cent. USA stocks are slightly higher in early trading Wednesday, Sept.
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The University of MI said the preliminary reading on its consumer sentiment index for September came in at 89.8, unchanged from the final August reading.
