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US Treasury Secretary Scott Besant said Deutsche Bank’s chief executive, Christian Sewing, had contacted him to downplay an analyst report that suggested European investors might sell US assets in response to trade threats.
Speaking at the World Economic Forum in Davos, Besant said: “The notion that the Europeans would sell US assets came from an analyst at Deutsche Bank, which, of course, was amplified by the fake news media, led by the Financial Times. The CEO of Deutsche Bank phoned in to say that Deutsche Bank does not stand with that analyst.”
Europe holds about $8 trillion of U.S. bonds and equities, making it America’s biggest lender and underscoring Washington’s reliance on foreign capital to finance persistent deficits, a note written Sunday by George Saravelos, Deutsche Bank’s chief foreign exchange strategist, said.
Saravelos wrote, “We spent much of the last year arguing that for all its military and economic strength, America has one major weakness: it is dependent on others to pay its bills through large external deficits. Europe, on the other hand, is America’s largest creditor.”
While Saravelos did not predict a selloff, he warned that rising geopolitical tensions could prompt some European investors to reduce exposure to the dollar, citing earlier repatriations by Danish pension funds.
“In an environment where the geo-economic stability of the Western alliance is being existentially disrupted, it is not clear why the Europeans would be so willing to play this role… While (US dollar) risk appetite across Europe is still very high, the developments of the past few days have the potential to encourage further dollar rebalancing,” the note said.
Deutsche Bank declined to comment on any contact between Sewing and US officials. “In accordance with long-standing policy, Deutsche Bank Research is independent in its work,” the lender said. Deutsche Bank said that the views expressed in individual research notes do not necessarily reflect the views of management.
The episode comes amid growing political sensitivity over bank research on trade, regulation and economic policy.
In 2021, Deutsche Bank pulled a research report that sharply criticized German financial regulators and policymakers for the long-term decline in the country’s banking sector. The lender later said that the views expressed were not authorized by research leadership and distanced itself from the tone and substance of the report.
Politicians in the US have also increasingly targeted bank economists. In August, President Donald Trump attacked Goldman Sachs Chief Executive David Solomon over research warning that US consumers would bear an increasing share of the tariff costs, suggesting he should replace the bank’s economist or “just focus on being a DJ”.
Trump himself was a longtime client of Deutsche Bank, which lent him millions of dollars for real estate deals and other ventures in the years before his first term as president.
Sewing is scheduled to speak in Davos on Thursday.
