P.O. +++ (BI) Deutsche Bank exec says €46 trillion derivatives book isn’t as risk as it sounds


   “Deutsche Bank exec says its €46 trillion derivatives book isn’t as risky as it sounds”

…In my opinion what Mr John Cryan says is not true.

…When you are involved in,give or take, twenty per cent of the world’s derivatives,the risk is huge.

…Plus the fact, even with the current safeguards, that a major default might rock the whole system.

   And Deutsche Bank is not exactly good at measuring risk, is it…?

   Francisco (Abouaf) de Curiel Marques Pereira

(Business Insider) Deutsche Bank is continuing to cut back the size of its derivatives book, which is not as risky as investors may believe, Chief Risk Officer Stuart Lewis told German weekly paper Welt am Sonntag.

“The risks in our derivatives book are massively overestimated,” Lewis told the paper. He said €46 trillion in derivatives exposure at Deutsche appeared large but reflected only the notional value of the contracts, while the bank’s net exposure to derivatives was far lower, at around €41 billion.

“The €46 trillion figure sounds gigantic, but it is completely misleading. The real risk is far lower,” Lewis said, adding that the level of risk on Deutsche Bank’s books was in line with that seen at other investment banking peers.

“We are trying to make our business less complex and are paring back our derivatives book. Parts of it were transferred into a non-core unit some years ago.”

New banking regulations imposed in the wake of the 2009 financial crisis discourage large bets on risky assets, and have forced Deutsche Bank to drastically cut back the scale of its derivatives exposure.
Derivatives are financial contracts that draw their value from the performance of an underlying asset, index or interest rate. They can be used to hedge risks.