DAX shaken as banking shares crash

BERLIN – Fresh upheavals shook the German banking sector on Friday, with renewed share price collapse at Commerzbank and Deutsche Bank triggering alarm among investors.

After recovering by more than 800 points in the past few days, the DAX stock market index of the country’s top 40 blue chips slipped back below 15,000 points.

Around noon, the DAX lost 2.05% to 14,898.65 points, causing the weekly gain to contract to less than one percentage point. The index rounded off a week full of fluctuations, first falling to its lowest ebb since the first week of January at 14,458 points, before a rapid recovery to 15,300 points.

The MDAX, which includes mid-cap stocks, fell by 2.63% to 26,547.39 points on Friday. On the US stock exchanges, too, trading got off to a loss-making start on Friday, but mainly affecting blue chips in the Dow Jones Industrial.

Deutsche Bank shares were at one point over 10% down on Thursday’s close, before making a partial recovery. Commerzbank shares were down about 6% in the mid-afternoon.

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German Chancellor Olaf Scholz dismissed any concerns however, after meeting other EU leaders in Brussels.

“Deutsche Bank has fundamentally modernized and reorganized its business model and is a very profitable bank. There is no reason to worry about anything,” he said on Friday.

Banking worries in Europe were partly triggered by the collapse of the Silicon Valley Bank in the US a fortnight ago and the more recent state-backed takeover of Credit Suisse in Switzerland.