GOLD 0.51% $1,391.7 gold futures

Bank Watch

  1. 12,250 Posts.
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    As many commentators are predicting that some sort of liquidation event may be coming in financial markets that may precipitate a run on the gold price I've started a new thread to watch what the banks are doing. Large market moving liquidation events always occur within banks so they will be the epicentre of any market crash. I developed a banking/market crash seismometer tool last year that tracks the gapping of the share prices of 8 large banks (on a monthly period) against the S&P 500 with data I've collected so far stretching back to 1997. Because of the difficult (manual) way in which I source the data for the seismometer tool I haven't updated my data/charts since June last year but intend to revive this project and post it on this thread. I've included my most current charts from last year in this post for anyone interested.

    Although I haven't followed the banks closely since June last year, one bank (that isn't one that's included in my banking seismometer tool) seems to be standing out as a current significant threat IMO.

    Below is the share price chart for Deutsche Bank.

    DB share price chart.PNG

    Deutsche Bank is the 4th most systemically important bank in the world according to research produced in August last year by the Office of Financial Research (OFR) within the US treasury department.

    Deutsche Bank has a systemic importance score of 4.2 and is behind only CitiGroup (4.3), HSBC (4.8) and JP Morgan Chase (5.0) for level of importance (see table below). For comparison sake The Bank of Chine ranks 17 on this same measure with a score of only 1.8.

    Even though Deutsche Bank ranks below CitiGroup, HSBC, and JP Morgan Chase on the overall score it out ranks Citi and JP Morgan when it comes to cross jurisdictional activity where it stands behind HSBC the leader on this measure by far. But Deutsche bets out HSBC on measures of Substitutabilty and Complexity. Deutsche is an important bank.

    Will Deutsche be the Lehman Brothers that sends markets down this time around? Let's keep watch.


    Systemic importance chart1.PNG Systemic importance chart2.PNG
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