A fresh slump in Deutsche Bank's share price sent European markets into a tailspin on Friday and left world stocks sliding toward their worst week in three months. David Pollard reports.
It's hard to compete with Deutsche Bank for headlines. But cutting 20 percent of your workforce is one way of doing it. Today, Germany's number 2 lender, Commerzbank, explaining why. (SOUNDBITE) (German) COMMERZBANK CEO MARTIN ZIELKE, SAYING: "Our main issue, and that of the entire sector, is that we don't earn enough money. Our profitability is simply not high enough." The gloss on the news is that Commerzbank aims to add two million customers over four years. But in that time, it will lose 10,000 employees as part of over a billion euros in cost savings. (SOUNDBITE) (German) CAPITAL MARKETS ANALYST OF ODDO SEYDLER BANK, OLIVER ROTH, SAYING: "We won't have a 'banking crisis 2.0' because we are in a banking crisis ... With Commerzbank cutting cut jobs and Deutsche Bank's problems with hedge funds, we see what's been visible for years - that banks have problems on the cost side AND on the revenue side." The unrelenting slump in Deutsche shares sent European stocks sliding towards their worst week in three months. The euro, too, hit - it touched an 8-week low against the safe haven Swiss franc. Deutsche's own share price dipping at one below a key psychological threshold - on news of hedge funds withdrawing collateral. (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "Nobody quite knows at this moment how the cards are going to fall but some speculators are suggesting that were the share price to fall below 10 euros a share, that would be the point at which action would be provoked." There's no sign of government action yet. CEO John Cryan instead issuing a letter to staff: Deutsche Bank is strong, he said. And many in the markets do believe that ... Others, though, taking defensive action just in case.