As we’ve discussed over the past week or so, investors are on the hunt for the next perceived weak links in the global banking system.

Credit Suisse had long been in trouble, years before the final crisis that forced it into a shotgun marriage with UBS.

On Friday investors turned their sights onto another long-term underperformer in Europe, Deutsche Bank (DB).

“Concerns over banks stability continues to be a source of volatility triggering big intraday swings in equity and rates markets. Deutsche Bank came under selling pressure on Friday as investors continue to hunt for the next victim in the current turmoil,” NAB’s senior foreign exchange strategist Rodrigo Catril observed in his morning note.

“European equities had a torrid Friday with regional indices closing over 1% or 2% lower on the day.

“Bank shares drove the decline with DB shares at the epicentre of the market rout. Shares of the German bank fell close to 15% intraday with its credit default swaps widening to levels not seen since the start of the pandemic.

“The sharp decline in DB’s shares prompted German Chancellor Olaf Scholz to call for calm, saying there was no question about the bank’s future. ‘Deutsche Bank has thoroughly reorganised and modernised its business model and is a very profitable bank,’ he told reporters in Brussels.

“By and large commentary from analysts quoted in the media corroborated the Chancellor’s observation, some analysts called the selling pressure on DB as irrational while others also indicated they were not concerned about DB going the way of Credit Suisse.

“DB ended the day down 8.5%. The Euro Stoxx 600 index fell 1.4%, led by a 3.7% fall in bank stocks.”

My colleague David Taylor had a piece on Deutsche’s latest woes on Saturday.