Deutsche Bank shares drop amid global jitters over banks

By DAVID McHUGH
Associated Press

FRANKFURT, Germany (AP) — Shares in Deutsche Bank, Germany’s largest lender, have fallen sharply and dragged down major European banks as fears about weaknesses in the global financial system send fresh shudders through the markets. Deutsche Bank shares were off 14% in Friday midday trading in Frankfurt. The drop follows a steep rise in the cost of financial derivatives, known as credit default swaps, that insure bondholders against the bank defaulting on its debts. Rising costs on insuring debt were also a prelude to a government-backed takeover of Swiss lender Credit Suisse by its rival UBS. The selloff of the German lender comes despite it having capital reserves well in excess of regulatory requirements and five straight quarters of profits.