Jim Armitage: Bank will swerve huge fine to keep us all mesmerised

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We all know many of Europe’s banks are insolvent, yet, like the audience in an Indian rope trick, we convince ourselves they aren’t.

The self-delusion, which prevents the continent’s economic collapse, only lasts if regulators and governments keep up the magician’s patter. The panic reaction to Deutsche’s potential mega-fine starkly highlights this. 

Deutsche can’t afford $14 billion, and Europe can’t afford a collapse of Deutsche. Given that, there’s no way the politicians on either side of the Atlantic will allow a fine anything like that size. Don’t panic, our hypnosis isn’t over yet.

The chaps at JPMorgan have been busy. After Monday’s hostile bid for their client SVG, they’re working fast to find rival bidders to those aggressive Americans. 

Interest has been high, but whether a bidder with a full cash offer as certain as HarbourVest’s can be found within the 14-day timetable is another matter. 

After SVG’s strong figures earlier, you’d have to hope so. With the luxury of a bit more time, a rival offer above 700p would be a reasonable expectation. But time is one asset SVG doesn’t have.

Source Article from http://www.standard.co.uk/business/jim-armitage-bank-will-swerve-huge-fine-to-keep-us-all-mesmerised-a3346866.html

September 16, 2016 |
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