The International Monetary Fund (IMF) has termed German banking major Deutsche Bank as the riskiest financial institution across the globe.
Deutsche Bank was the most important net contributor to systemic risks among global systemically important banks (G-SIBs), followed by HSBC Holdings and Credit Suisse Group.
"The relative importance of Deutsche Bank underscores the importance of risk management, intense supervision of G-SIBs and the close monitoring of their cross-border exposures, as well as rapidly completing capacity to implement the new resolution regime," IMF said.
The institution also said that the German banking industry poses a higher level of possible outward contagion than internal risks.
"In particular, Germany, France, the U.K. and the U.S. have the highest degree of outward spillovers as measured by the average percentage of capital loss of other banking systems due to banking sector shock in the source country," IMF said.
The move comes just after the Deutsche Bank’s US-based subsidiary Deutsche Bank Trust failed the Federal Reserve’s annual stress tests for the second time.
Nearly all major US lenders including Bank of America, Citigroup and Wells Fargo passed the stress test, with the exception of the US divisions of Deutsche Bank and Santander.