All nine declined to comment on the report.
"Institutions that are not profitable might not be able to generate enough capital in the future should adverse shocks hit," Tobias Adrian, the director of the IMF's monetary and capital markets department, told reporters. "It might become a financial stability risk not to be profitable."
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Some of the IMF's views are already conventional thinking on Wall Street. Deutsche Bank's stock, for example, trades at less than half of its book value, or net worth, and has traded well below this level since 2010. This suggests investors don't believe it will deliver returns that create value in the long run.
Deutsche Bank has struggled to maintain profits during a prolonged turnaround hobbled by high legal fees and technology costs and capital constraints on dominant businesses such as fixed-income trading. Another challenge for the German lender is that retail banking in its home market is less profitable than that business is for many big banks elsewhere. Deutsche Bank raised $8.5 billion earlier this year by selling shares, putting pressure on executives to prove they can use the fresh capital to boost profits. A Deutsche Bank spokesman declined to comment after the release of the report.
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Yet "problems in even a single" one of such institutions "could generate systemic stress," the IMF said.
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The IMF said regulators should press their financial institutions to resolve nonperforming loans, drop unprofitable lines of business and develop plans to unwind the bank in case of failure.
https://asia.nikkei.com/Politics-Economy/Economy/IMF-lists-nine-banks-likely-to-...I wonder if this will stop Deutsche and fellow Banks manipulating the markets?
Silver, $1000 an oz, here we come.