Deutsche Bank’s collapse would be a threat to the whole eurozone

It could be next month. It might be next week. Or it might well happen over the weekend. But today’s collapse in the share price of Deutsche Bank, and the huge rise in the cost of insuring its debt against default, means it is probably only a matter of time before there’s an intervention. It looks increasingly inevitable that Deutsche will require some form of rescue, led by the German government and the European Central Bank. The trouble is: that will be a threat to the entire eurozone.

To market insiders, the real surprise of today’s collapse in confidence in Deutsche Bank is that it took so long. On Friday morning, its share price dropped by 15 per cent, while the cost of insuring against a default soared. The charts look eerily similar to Silicon Valley Bank two weekends ago, and to Credit Suisse last weekend.