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Market Reacts to Deutsche Bank Report

Deutsche Bank and other European banks dropped on a Bloomberg story that the bank was considering floating additional equity. No comment from DB , according to CNBC's London Bureau. The market's reaction is surprising, given what we already know:

1) European Central Bank Executive Board member Juergen Stark said yesterday that German banks are undercapitalized.

2) Commerzbank, Germany's second largest bank, said today it may need to raise new equity; they already owe the government about $25 billion, so they need to find some way to repay that.

3) while some of the Basell III rule implentations have been kicked down the road, higher capital requirments are definitely coming in the next few years. That combined with more regulation will put more pressure on European banks.

Deutsche Bank has a very poor standing when it comes to liquidity ratios re: Basel 3.

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