New York/Frankfurt: Even before the opening bell in New York, Thursday looked like a grim day for some of the giants of global banking.

But few expected the barrage of bad news that soon hit on both sides of the Atlantic—a rat-a-tat-tat of job cuts, scandal and financial worry that sent bank shares tumbling and left many investors wondering just where or when the pain would end.

It began in Germany, where long-struggling Commerzbank AG unveiled yet another plan to regain its footing, this time by cutting one in five of its employees. In Washington, came still more blistering attacks on John Stumpf, whose grip atop embattled Wells Fargo & Co., the largest US mortgage lender, remains tenuous amid the uproar over a scandal involving unauthorized accounts.

Also Read: Deutsche Bank shares tank below €10 for first time

And then, back in Germany, came the bombshell: revelations that some hedge funds were moving to reduce their financial exposure to Deutsche Bank, now the biggest worry in global finance. Before Stumpf left the US House chambers after more than four hours of grilling, news broke his bank would be hit with more penalties after improperly repossessing cars owned by US soldiers.

“While each has unique challenges, the overwhelming thing that has happened to the banks is they’re forgetting their purpose, while complexity is increasing opportunity for errors," said Jon Lukomnik, executive director of the Investor Responsibility Research Center Institute in New York.

Eight years after the financial crisis, the global banking industry is groping for a way forward. Global regulators have sought to make banks look more like boring utilities, but that road has proven steep. Emboldened by an international populist groundswell, they continue to dole out fines and penalties, and firms are scrambling for ways to make money as trading volumes decline and capital requirements become more stringent.

The 38-company Bloomberg Europe Banks and Financial Services Index has tumbled 24% this year, while the KBW Bank Index of 24 US lenders has slid 4.6%, led by Wells Fargo’s 18% decline.

In the past 10 days, Stumpf has agreed to forgo $41 million in compensation, and an adviser to Turkish President Recep Tayyip Erdogan glibly suggested on Twitter that Turkey buy Deutsche Bank as its market value fell by more than half this year. The German lender is now barely worth more than the $14 billion settlement the US department of justice would like to extract in a long-running investigation of the bank’s mortgage securities business.

Commerzbank chief executive officer Martin Zielke announced plans Thursday to eliminate 9,600 jobs, leaving it no bigger than it was before its 2008 acquisition of Dresdner Bank. The Frankfurt-based bank has lost about 39% of its market value this year.

“Germany is still overbanked, and it’s tough to have Germany as your home base when you want to compete with French, Spanish or American peers that operate in less fragmented home markets," said Klaus Fleischer, a professor of finance at the University of Applied Sciences in Munich.

Wells Fargo agreed to pay more than $24 million to the justice department and the Office of the Comptroller of the Currency to settle allegations that it improperly repossessed cars owned by members of the military.

Also Read: Wells Fargo’s $60 mn clawback

“I don’t personally see how you survive," Representative Denny Heck, a Washington Democrat, told Stumpf Thursday as the 63-year-old CEO testified before the House Financial Services Committee.

Lawmakers called for Stumpf to be fired, for Wells Fargo’s board to be replaced and for the bank to be broken up.

“Your problem is coming," Representative Mike Capuano, a Massachusetts Democrat, told Stumpf at the hearings. “You think today is tough? It’s coming. When the prosecutors get ahold of you, you’re going to have a lot of fun."

As the hearing was under way, news broke that some of Deutsche Bank’s clients were said to be reducing their collateral on trades, sending its New York-listed shares down as much as 9.1%. Earlier this week, CEO John Cryan was forced to shoot down speculation the bank needs more capital and may require a bailout, as its shares touch record lows and a US litigation settlement looms.

“Our trading clients are amongst the world’s most sophisticated investors," Michael Golden, a spokesman for Deutsche Bank, said in an e-mailed statement. “We are confident that the vast majority of them have a full understanding of our stable financial position, the current macroeconomic environment, the litigation process in the US and the progress we are making with our strategy." Bloomberg

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