- Bond investor Jeff Gundlach says Deutsche Bank's (NYSE:DB) woes highlight the impact of the negative-interest-rate policy in Europe on the region’s lenders.
- “You cannot save your faltering economy by killing your financial system and one of the clear poster children for this is Deutsche Bank’s stock price,” he said. “If you keep these negative interest rate policies for a sufficient future period of time you are going to bankrupt these banks.”
- Europe’s banks have seen their value shrink by about $280B in 2016; DB has lost almost half its market value.
- “Deutsche Bank will be supported by Germany if push comes to shove,” he says. “But what about Credit Suisse (NYSE:CS), which has shown a similar decline in stock price? Who’s there to bail them out?”
- Gundlach also says that even the Fed, which has not cut rates below zero, is seeing signs that its policies aren’t working.