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IMF officials downplay risk of imminent Deutsche Bank crisis 

October 7, 2016

David Lawder & Lesley Wroughton, Reuters

International Monetary Fund officials sought to play down the risk of an imminent crisis over Deutsche Bank on Wednesday and expressed confidence that German and European authorities were working to ensure stability.

Questions over the health of Germany's largest lender loomed large over the start of the IMF and World Bank annual meetings in Washington, dominating a news conference on risks to global financial stability.

Deutsche has been engulfed by a crisis of confidence since the U.S. Department of Justice last month demanded up to $14 billion to settle claims that Deutsche missold U.S. mortgage-backed securities before the financial crisis. The amount is viewed as a major drain on its capital.

Peter Dattels, the IMF's markets and capital markets deputy director, said Deutsche Bank was systemically important and needed to revise an outdated business model that has left it earning too little profit in an era of very low to negative interest rates.

"Deutsche Bank ... is among banks that need to continue to adjust to convince investors that its business model is viable going forward and has addressed the issues of operational risk arising from litigation," Dattels told reporters. Read more

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