According to Bloomberg, Deutsche Bank is rumored to have approached banks about arranging a stock sale of as much as 9 billion euros in order to meet stricter capital rules in a response to Basel III which is expected to require European banks to shore up tens [if not hundreds] of billions in new equity capital. In fact, the rules that are under consideration by the Basel committee may for force Germany’s 10 biggest banks to come up with another €105bn of additional capital. This could mean that all the ugly toxic waste that has been buried deep on the bank's balance sheets may be set to emerge.
With sentiment towards the region’s peripheral sovereign debt standing at levels last seen in May, perhaps it’s time to start turning bearish on the euro.
Read the Bloomberg story here.
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