Gonzalo Meza in Geopolitics, Directors and Executives, Managers Managing Director (looking for a new challenge) • Project Alpha Sep 27, 2016 · 1 min read · +700

Deutsche Bank: The weakest link?

Deutsche Bank: The weakest link?

In 2011, a group of scientists at the Swiss Federal Institute of Technology in Zurich demonstrated that a tightly-knit group of 147 companies (in red in the network graph above, called "superconnected companies"), controlled a disproportionate amount of the total wealth.  While this probably didn't surprise groups like Occupy Wall Street, the news went relatively under-reported and their implications barely mentioned by mainstream news agencies.

Guess who is in that list?

The team at the ETH Zurich further classified their list by order of influence that these companies hold.  And today's "bad boy" of the financial world, Deutsche Bank, is the 12th most important company according to them.

Perhaps you have heard lately that something's going on, but let's recap what is happening:

Why it matters?

As one of the main superconnected companies in the world, Deutsche Bank is tightly connected by a web of mutual ownership and revenue with the other 146 superconnected companies, creating a potential cascade effect.  The term "too big to fail" does come to mind.

Still sceptical?  The loss of confidence in the financial sector, following the leaked report last weekend, caused a 23 billion GBP loss on the FTSE within just one day.

Ali Anani Sep 28, 2016 · #7

#5 That said, I believe the bank is too big to die- then it is not a living one @Aurorasa Sima for it were the bank would die

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Aurorasa Sima Sep 28, 2016 · #6

Highly interesting posts. Thank you!

Aurorasa Sima Sep 28, 2016 · #5

#4 I am, dear Ali. While they will not pay a fine in the amount suggested (the US banks have settled for considerable lower amounts too), it´s a caricature of arrogance and selfishness that the once so powerful bank is now a risk factor. I believe that they did not ask for government support but the negative press definitely does not help the situation and the share fell even deeper.

They will cut 9k jobs, so I heard and they still have the Postbank to sell. And there are other options like a merger with another struggling German bank. Again, the current press does not help negotiations. Josef Ackermann, who was boss from 2002 - 2012 when some of the biggest mistakes have been made feels he did not make any.

That said, I believe the bank is too big to die.

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Ali Anani Sep 27, 2016 · #4

I think @Aurorasa Sima would be very interested in reading this buzz

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Ali Anani Sep 27, 2016 · #3

@Gonzalo Meza- Interesting and I wonder what criteria were used to classify the bank. Personally, this is interesting as the buzz provides good example of what I called The Canopy Effect.

Sharon Fulgenzi Sep 27, 2016 · #2

The picture above caught my attention. Thanks for sharing. Very interesting and good to know.

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debasish majumder Sep 27, 2016 · #1

nice insight Gonzalo Meza! enjoyed read. thanks for the share.

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