The Once Impossible Merger Now Seems Probable

Struggling German Banks Finally In Merger Talks

A merger between the two struggling German banks is not going to be an easy process, which is partly why the two have pushed the deal to the side for so long. As we wrote in the ComplianceX piece called “Can Deutsche Bank Bounce Back in 2019?, other banks like UBS did not want to take over the bank because their lack of revenue growth along with the scandals that led to German police raiding their headquarters.

On the other hand, this merger is government-backed and that shows that the German government is ready to approve a deal that would otherwise be a headache to coordinate. With so many job cuts, an economic slowdown in Europe paired with an investigation into the dealings between Deutsche Bank and U.S. President Donald Trump, the country must be begging to solve its woes in the financial sector.

Without merging with Commerzbank, Deutsche Bank will face a rough path to their 150th birthday, which will be March 10, 2020—if they can make it that far.

Washington Post Fact-Checks Sen. Bernie Sanders (I-VT)

The Washington Post gave Sanders “Two Pinocchios” for saying in a recent speech that not a single Wall Street executive went to jail and in return, the industry received a trillion-dollar bailout.

The fact-check said that one banker, Kareem Serageldin (global head of structured credit at Credit Suisse at the time), was arrested trying to hide hundreds of millions of dollars in losses.

Now for the bailout: almost all predictions say that the Troubled Asset Relief Program (TARP) dished out a few hundreds of billions of dollars to the banks, but not necessarily the nicely rounded one trillion dollar-figure that Sanders is throwing around. Estimates could range from a quarter to half of a trillion dollars from economists and others.

However, Sanders Campaign Spokeswoman Adrianna Jones noted that the numbers estimated here are way off and that when you factor in loans, the total could skyrocket anywhere from $7.7 trillion to $29 trillion.

London Exodus: Bankers Put On Standby For Overnight Relocation

If the U.K. votes for a no-deal Brexit, JP Morgan, Goldman Sachs, Morgan Stanley, Bank of America, as well as Barclays—among others—have spaces ready across Europe in places like Frankfurt, Luxembourg, Dublin, Paris, Madrid and Milan to relocate their employees immediately.

In this scenario, there will be an estimated loss of 7,000 jobs in London, while 2,000 jobs are created on the continent and Ireland in response to the vote. The vote will have serious ramifications for the finance industry across the European Union, particularly in the U.K.

Malaysian Officials Not Backing Down Over 1MDB

Prosecutors from Malaysia issued summonses for Goldman Sachs’ units in London and Hong Kong. The legal onslaught from Malaysia against Goldman Sachs continues—and for good reason.

The new government came into power last May and the 1MDB scandal had significantly influenced the election, which ousted their former prime minister after 10 years of power, and launched corruption investigations.

The billions of dollars misallocated from the 1MDB scandal that were supposed to be invested in Kuala Lumpur are now at the center of the investigation against Goldman Sachs and corrupt Malaysian officials.

 

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