No crisis lurks in sub-prime woes: Deutsche Bank

FRANKFURT (Reuters) - Problems stemming from the sub-prime mortgage lending market in the United States may grow but will not precipitate a broad financial crisis, an executive responsible for Deutsche Bank's risk management said on Tuesday.

Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) management board member Hugo Baenzier said write-downs stemming from problems in the U.S. sub-prime market could be in the $70-90 billion range but that hedge funds could easily absorb the damage.

"There will be more but I don't think we will see systemic risks in this area," Baenziger told a financial conference organized by Germany's central bank.

Baenziger said the problems that U.S. lender Bear Stearns BSC.N has had with two of its hedge fund businesses active in the mortgage lending market were unlikely to crop up at other banks.

"I don't expect there will be other Bear Stearnses," he said.

About 800 of the hedge fund industry's 8,000 firms close their doors every year, Baenziger noted.

"The market brings an incredibly large amount of discipline to hedge funds," he said, adding that hedge funds have increased the transparency of market pricing and diversified market risks.

Deutsche Bank itself conducts derivatives and repo business with hedge funds but does not lend to them, Baenziger said.