Is Deutsche Bank steaming towards an iceberg? In June 2016, the IMF said that Deutsche Bank appears to be the most important net contributor to systemic risk in the global banking system. In June/July, Deutsche Bank's US unit failed the Federal Reserve's stress test. DB's European unit narrowly passed the ECB's stress test. But in a Sept 16 report, a Credit Suisse analyst says that Deutsche Bank's common equity tier 1 ratio, a measure of a bank's financial strength, was below the ECB's minimum requirements. In August 2016, Deutsche Bank was removed from Europe's STOXX Europe 50 index. Deutsche Bank's market value has fallen 65% from nearly fifty billion to sixteen billion today. It hit new lows today. The always helpful US government has just assessed a fifteen billion fine on Deutsche Bank for alleged irregularities during the housing bubble collapse in 2008. DB has a $5 billion litigation reserve and is trying to negotiate the fine down to $5 billion. The bank's net revenue has fallen 21% in the first half of the year. And today news came out that a couple of big hedge funds are pulling their money out of Deutsche Bank. While a relatively small sum in the big picture, that news has everyone spooked. http://www.cnbc.com/2016/09/29/the-deutsche-bank-crisis-how-we-got-here-and-where-we-are.html Personally, I would have expected to see this from a Greek or Italian bank, but Germany's vaunted Deutsche Bank? Unthinkable. And unfortunately, it's against European tradition to bail out struggling banks in American 2008 style. Angela Merkel's government is making noises like there will be no bailouts and Deutsche Bank is on its own. So... if Deutsche Bank fails, what will the effects be on the European and world banking systems? Will there be a domino effect and a new financial crisis?