Ackermann: More writedowns likely
Deutsche Bank Chief Executive Josef Ackermann warned that the pain may not be over for the global banking sector, with more writedowns possible if the liquidity and credit crisis continues to hit valuations.
Major US and European banks have written down more than $60 billion due to a meltdown in credit markets, and two German banks - IKB Deutsche Industriebank AG and SachsenLB - nearly collapsed under the strain of the turbulence.
"The fact is we have seen the collapse of prices at the end of every week," Ackermann told students at the London School of Economics. "Is that the end of the story? I don't think so."
He said that without a major bailing out of lenders some prices could drop further "and then further writedowns may be necessary," he added.
Ackermann did not comment on the specific situation at Deutsche Bank, which took a 2.2 billion euro writedown in the third quarter. He said in November that he did not predict further markdowns for the bank.
Asked on the sidelines about the bank's closely watched 2008 profit targets, including an 8.4 billion euro pretax profit goal, Ackermann did not answer. But the bank confirmed separately that it stood by its goals.
Ackermann warned that market turbulence could spill over into the broader economy.
Agencies
(China Daily 01/16/2008 page17)
