Reuters reported last month that Deutsche Bank’s derivatives exposure is tying up capital that could have generated income of 500 million euros a year. Reuters also reported the bank has set aside over 1 billion euros to cover the cost of offloading derivatives moved to its so-called “bad bank,” or capital restructuring unit to be wound down or sold.
The restructuring has seen the bank hive off 288 billion euros of assets into the bad bank. Equities, including equity derivatives, accounted for around 170 billion euros of those assets. Fixed-income assets, including long-dated interest rate and credit derivatives, accounted for 79 billion euros.
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