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Monday, October 3, 2016

German Politicians Accuse US Of "Economic War" Against Deutsche Bank

When we first heard the news that the US DOJ had slapped Deutsche Bank with a $14 billion settlement on September 15, a number that looked oddly similar to the $14 billion fine the EU slapped on Apple, we determined that this was likely nothing more than "blowback" on behalf of the US, saying "just a few weeks after the EU slapped Apple with a $14 billion bill for "back taxes," the U.S. has apparently responded with a $14 billion fine of their own to Deutsche Bank to settle an outstanding probe into the company's trading of mortgage-backed securities during the financial crisis."
Today, after three weeks of unprecedented volatility in the stock price of the German lender which sent its shares to all time lows as recently as Friday, Germany has latched on to this line of attack as German politicians accused the US of waging economic war against ­Germany as, in the words of the FT, "concern continues to rise among its political and corporate elite over the future of Deutsche Bank."
The German parliament’s economics committee chairman Peter Ramsauer, in an interview with Welt am Sonntag, said the move against Deutsche "has the characteristics of an economic war", adding that the US had a "long tradition" of using every available opportunity to wage what amounted to trade war "if it benefits their own economy", and the "extortionate damages claims" being made in the case of Deutsche Bank were an example of that. According to the German politician, the threat to force Deutsche Bank to pay a $14 billion fine over its mortgage-backed securities business before the 2008 global crisis “has the characteristics of an economic war.”“Extortionate damages claims” in the case are an example of that, said Ramsauer.
Another German politician, Merkel ally and MEP Markus Ferber suggested, as we did, that the Deutsche Bank investigation is a “tit for tat response” from the US Department of Justice after Brussels imposed a record €13 billion penalty against Apple’s tax misdoings in Europe. It's not just Apple however: earlier this year, Germany’s Volkswagen agreed to pay $16.5 billion in the US for cheating on American diesel vehicle air pollution tests between 2008 and 2015. The fines still risk growing by billions and VW needs to recall 85,000 vehicles.

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