Crisis at German bank
Deutsche Bank woes prompt sell off in New York
Deutsche Bank shares plunged amid reports that some investors have withdrawn funds.
Hedge funds bailed out, according to agency report, amid concerns that it will struggle to meet a $14 billion fine proposed by a US regulator.
The penalty is a result of it mis-selling mortgage-backed bonds during the financial crisis.
The bank has been forced to deny that it has called for support from the German government.
Shares in the country’s biggest bank plummeted 7%, dragging down other banks and the overall US market. Goldman Sachs fell 2.8% and JP Morgan 1.6%.
Deutsche Bank said in a statement: “Our trading clients are among the world’s most sophisticated investors.”
It added: “We are confident that the vast majority of them have a full understanding of our stable financial position, the current macro-economic environment, the litigation process in the US and the progress we are making with our strategy.”
Wall St traders were unconvinced and the Dow Jones Industrial Average fell 200 points or 1.1%. The Nasdaq and Standard & Poors were both 1% lower.