Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
US Treasury secretary Scott Bessent said the chief executive of Deutsche Bank, Christian Sewing, had contacted him to play down an analyst report that suggested European investors could sell US assets in response to trade threats.
Speaking at the World Economic Forum in Davos, Bessent said: “This notion that Europeans would be selling US assets came from a single analyst at Deutsche Bank, of course, the fake news media led by the Financial Times amplified it. The CEO of Deutsche Bank called to say that Deutsche Bank does not stand by that analyst.”
The note, written by Deutsche Bank’s chief forex strategist George Saravelos on Sunday, said that Europe held roughly $8tn of US bonds and equities, making it America’s largest creditor and underlining Washington’s reliance on foreign capital to finance persistent deficits.
“We spent most of last year arguing that for all its military and economic strength, the US has one key weakness: it relies on others to pay its bills via large external deficits. Europe, on the other hand, is America’s largest lender,” Saravelos wrote.
While Saravelos did not predict a sell-off, he warned that intensifying geopolitical strains could prompt some European investors to reduce dollar exposure, citing earlier repatriation by Danish pension funds.
“In an environment where the geoeconomic stability of the western alliance is being disrupted existentially, it is not clear why Europeans would be as willing to play this part . . . With [US dollar] exposure still very elevated across Europe, developments over the last few days have potential to further encourage dollar rebalancing,” the note said.
Deutsche Bank declined to comment on any contact between Sewing and US officials. “As a matter of long-standing policy, Deutsche Bank Research is independent in their work,” the lender said. Views expressed in individual research notes do not necessarily reflect those of management, Deutsche Bank added.
The episode comes amid growing political sensitivity around bank research on trade, regulation and economic policy.
In 2021, Deutsche Bank pulled a research report that sharply criticised German financial regulators and policymakers for what it described as a long-term decline in the country’s banking sector. The lender later said the views expressed were not authorised by research leadership and distanced itself from the report’s tone and substance.
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 American consumers would bear a rising share of tariff costs, suggesting he should replace the bank’s economist or “just focus on being a DJ”.
Trump was himself a long-standing client of Deutsche Bank, which lent him hundreds of millions of dollars for real estate deals and other ventures in the years before his first term as president.
Sewing is due to speak at Davos on Thursday.