Deutsche Bank is counterparty to 55 <i>trillion</i> euros of derivatives contracts (about 65 trillion USD). I worked for 3 years on its trading floor. It was Sales-a-gogo. &quot;Print as much as you can&quot;. It&#x27;s one of the very biggest counterparties to derivatives. Imagine if there was basis risk of only one tenth of one percent on those books (ie hedge imperfection usually due to a third factor such as credit quality or geographic mismatch). That would mean a P&amp;L of 32.5 billion dollars. For risk on only one thousandth of the notional value of its derivatives books. Deutsche Bank is only worth 22 billion dollars.<p>Now of course such P&amp;L could be positive too, but inevitably, when the wolves of the markets start hunting, they&#x27;ll seek out the positions that are &quot;wrong way&quot;. Let alone if DBK starts to try to unwind some of these derivatives. I bet it wouldn&#x27;t be able to unwind even 2% (1.3 trillion!) of the books without blowing itself up.<p>I think this bank is Exhibit A to the catastrophic excesses of the past 20 years.