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Comment by weego | Hacker News Reader

Also last year Deutsche Bank gave the CEO a €150 million personal loan using his Wirecard stock as collateral.

This isn't a case of a few errors and lack of a little due diligence.

Just for the record, Deutsche Bank is a private company with the majority of stocks owned by non-German investors. It is not to be confused with the Bundesbank, which is something like the German FED.

it's a public company, its shares are tradeable on exchanges

"Private" and "public" companies don't have the same meaning in our side of the Pond. In France, "public" = "state-owned" and "private" = "not public".

Oh, wasn't aware of that. Not that I'm surprised that is Deutsche Bank. They have a long track record of shady dealings reaching back to, as far as I remember, the 90s.

"Bank of America", anyone? (Just talking how that name could also be misunderstood, I have no idea if they're scumbags or not).

> Also last year Deutsche Bank gave the CEO a €150 million personal loan using his Wirecard stock as collateral.

That kind of stuff is pretty common though, Elon Musk has about 15 billion dollars, 100x that amount (!), of his Tesla stocks posted as collateral for personal loans: https://www.theverge.com/2020/5/8/21252487/elon-musk-persona...

And Deutsche Bank is a big player in this kind of business, remember their involvement with Trump?

Honestly why do banks accept this collateral when underwriting a loan? Stocks are known to be volatile, aren't there more stable assets you should collateralize (e.g. inventory, real estate)?

Depends on advance rate. Loaning 20% of the value of the collateral seems pretty safe on average.

It's common, but the problems at Wirecard have been public for a long time and will be even more well known in the industry so you would imagine that due diligence would have questioned the potential value of his collateral against such a loan.

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