World Markets

Germany won't let Deutsche Bank become ‘Lehman moment’: Analyst Peter Boockvar

Central bank policy and 'Deutsche Bank'

Deutsche Bank won't fail, Peter Boockvar, chief market analyst at economic advisory firm The Lindsey Group, told CNBC on Monday, as shares of the German lender sank to record lows.

In some ways, the current troubles are a "Lehman moment," given Deutsche Bank's status as the "monster bank of Europe," Boockvar said on "Squawk on the Street," making an analogy to the collapse of Lehman Brothers in the U.S. at the start of the 2008 financial crisis.

Despite German Chancellor Angela Merkel reportedly stating otherwise, "it's not necessarily a Lehman moment," said Boockvar, "because we have to assume that the German government in some way will bail them out."

With the European Central Bank bracing itself for the impact of Brexit, the U.K.'s departure from the European Union, Boockvar believes Germany would avoid potential Lehman moments at all costs.

Fighting rumors of a looming government bailout, CEO John Cryan asserted Deutsche Bank will not ask for German government aid, and aims to resolve its problems internally, which include the potential of a massive U.S. Justice Department fine.

Last week, the DOJ suggested the bank pay $14 billion to settle a number of investigations related to mortgage securities. Shares slid another 6 percent in early Monday trading to just under $12 per share.

"I think it gets to the larger picture of the destruction of the profitability and economics of banking in this modern-day regulatory and central bank world we're in," Boockvar said of Deutsche Bank's recent stock slip.

According to Boockvar, negative interest rates are the toxic factor in the equation. "It is a tax on capital," he said. "Every day, [negative rates] are bleeding the European banks."

Boockvar's analysis pinned the problem on monetary policy and the central banks' damaged business model. "How do you raise more capital if your profits are declining?"

To move closer to a solution, politicians and central bankers need to find a way to coexist despite this inherent conflict, Boockvar said, "but, inherently, it's impossible."