(Bloomberg) -- Global governments are less likely to come to the rescue of banks than during 2008 financial crisis because the system is more stable, UBS Group AG Chairman Axel Weber said when asked about the prospects of Germany assisting Deutsche Bank AG.
“Interventions in the future will only be driven by the need to stabilize the system and there will be no focus on single players,” Weber, a former president of Germany’s Bundesbank, said in a Bloomberg Television interview with Guy Johnson Wednesday.
Asked whether the German bank’s woes represent a Lehman Brothers Holdings moment for European lenders, he said the system-wide turmoil caused by the collapse of the New York investment bank is much less likely to happen now. Banks have raised huge amounts of capital and cut ties to each other, reducing the risk that one lender’s problems will reverberate across the system, he said.
“We are very far in terms of how solid banks are now from where we were in 2007 and 2008” Weber said.
Deutsche Bank’s shares touched record lows this week, extending losses after the U.S. Department of Justice requested $14 billion to settle fraud claims over its mortgage-backed securities business. While the German lender insisted it won’t pay anywhere near the amount requested, the figure heightened concern it’s mounting legal bills will force Cryan to tap investors for fresh capital, or even seek a state rescue.
Cryan said in an interview with Germany’s Bild newspaper that there are no plans for a capital increase and government aid is “out of question.”
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