Deutsche Bank officials arrive in Washington this week in the hopes of finishing off a deal with the DOJ to reduce the pending fines for mortgage-backed securities fraud, from $14 billion to $5.4 billion. News coverage of DB’s woes includes www.cityam coverage of the “Fall of the House of Merkel,” as her failure to act on the DB crisis is now losing her support and destroying her reputation as the anchor of European stability. Even if she wins re-election, it will be due to a laughable lack of alternate candidates, rather than her continuing popularity.

A DB bailout is seen as inevitable, with some proposals calling for the German government to recapitalize the bank by buying a 20-percent stake. Jeremy Warner of the Daily Telegraph headlined his article on Monday, “Deutsche Bank woes reveal a new financial crisis,” which he says is different from that in 2008, because government regulators have made matters far worse by their zero- interest-rate policies, which make banks unprofitable; by boosting reserve requirements under Basel IV; and by imposing fines for past misdeeds that are a new form of indirect taxation.

The NY Times’ Dealbook has a sober assessment of DB’s appetite for high-risk transactions out of its London offices as the root cause of the crisis, which can bring down the entire banking system, due to all the big Wall Street and other banks that are counter-parties to the derivatives portfolio built up by Deutsche Bank’s London center. The Times claims that DB is leveraged at 25:1—$75 billion in equity supporting $1.8 trillion in assets, but this is a significant understatement. Using the tangible capital measures and International Financial Reporting Standards, Deutsche Bank is leveraged at 37:1. This is also the figure cited by the FDIC. By comparison, JPMorgan’s ratio, is 18:1 using the more accurate international measures.

[The calculations are: Deutsche Bank’s tangible capital is 2.68% of assets. So the leverage ratio is 100/2.68 = 37 in the case of Deutsche Bank. JP Morgan Chase’s tangible capital is 5.49% of assets; it’s leverage ratio is 100/5.49 = 18].

DB’s assets are heavily concentrated in Level 3 securities, which are near impossible to sell in a crisis and also nearly impossible to properly value. 32 billion euros, or half of the bank’s equity buffer, is in Level 3 securities.

Bloomberg adds another piece to the Deutsche Bank scandal, reporting that the U.S. Department of Justice and the UK Financial Conduct Authority are probing DB’s role in a $10 billion money-laundering scheme, engineered by DB’s former chief trader in the Moscow branch, Tim Wiswell. Using a technique called “mirror trading,” involving offshore entities, Wiswell helped Russians illegally launder their money overseas—until he was caught and fired. In a wrongful dismissal suit, Wiswell made clear that his bosses back in London were fully aware of everything he was doing, and had signed off on all of the new clients he had served through his money-laundering actions.

Marketwatch reported Monday that a Milan federal prosecutor has indicted three DB executives, along with Nomura International officials and top management of Banca Monte dei Paschi di Siena, on fraud charges, based on BMPS’s fraudulent reporting on its financial well-being. Judge Livio Cristofano acted off of findings of a one-and-a-half year probe by Italian prosecutors of stock price manipulation and false accounting by the Siena bank, in partnership with DB and Nomura. A plea deal was requested by the bank in July, and the court will soon decide. But 13 executives from the three banks were formally charged on Saturday and face criminal trial. This includes six current and former DB executives.

Yesterday’s Colombian plebiscite for “peace” with the FARC narco-terrorists—which all along was a thinly-disguised British plan for shameless drug legalization, and which was widely expected to pass by a margin of 2 to 1—was soundly rejected by the Colombian population, with 50.21 percent voting “No” and 49.78 percent voting “Yes.” A shocked Washington Post Monday reported that “Colombians voted against the peace accord, in a Brexit-style backlash that defied pollsters’ predictions and left supporters of the deal in tears.”

Among those crying hardest today are Tony Blair, the long-time political godfather of Colombian President Juan Manuel Santos, who risked everything on the peace deal, and lost. Also in tears today is Barack Obama, whose administration sponsored, organized, promoted, and lobbied for the deal at every turn, going back years. The final accord was signed a few weeks ago in the smiling presence of Obama’s Secretary of State John Kerry, Cuban President Raul Castro, Peruvian President Pedro Pablo Kuczynski, and U.N. Secretary General Ban Ki Moon.

“Sunday’s outcome,” the Washington Post moaned, “also amounts to a setback for the United States and the Obama administration,” which had gone so far as to offer to remove the FARC, which is the world’s largest cocaine cartel, from the State Department’s list of terrorist organizations, allowing American banks and businesses to deal with them.

Back in June 1999, then New York Stock Exchange president Richard Grasso met in the Colombian jungle territory run by the FARC, with the narco-terrorist group’s chief financial officer, Raul Reyes, to discuss “mutual investments.” The two men were photographed in a tight, fraternal embrace—which the LaRouche movement made infamous internationally as the “Grasso Abrazo.”

In Feb. 5, 2016, EIR summarized what was really behind the “peace” deal:

“In 2014, the FARC leadership, which controls extensive marijuana, coca, and poppy plantations in the Colombian countryside, proposed at the negotiating table that the government agree that the State identify possible industrial and artesanal uses of these narcotics, and then `regulate the production and market for coca leaf, poppy, and marijuana.’ Last December, Santos took the first steps towards that, signing a decree legalizing the cultivation, processing, R&D and export of `medical’ marijuana. The plan is to turn marijuana exports into as big an `industry’ as flowers or food, Colombia’s Health Minister told Bloomberg news in January. On Feb. 3, PharmaCielo—a Canadian company run by former executives of Britain’s notorious Philip Morris company and speculator James Rogers, co-founder of George Soros’s Quantum Fund—filed their application to start farming and producing marijuana in Colombia. George Soros held a `very long meeting’ with Santos in 2012 to coordinate the operation.”