Poll: Should Deutsche Bank consent to the release of BaFin's LIBOR probe results?
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Poll: Should Deutsche Bank consent to the release of BaFin’s LIBOR probe results?

by dbriskalert on Mar 14, 2013
This month BaFin will complete its probe of LIBOR rate-rigging allegations at Deutsche Bank.  Opposition party politicians in Germany have asked BaFin to release the results of its investigation into Deutsche Bank’s alleged role in the LIBOR rate-rigging scandal.  BaFin claims that under German bank secrecy law it is unable to release the investigation without the bank’s consent.   {read more}
Poll: Will Germany Break Up Deutsche Bank?
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Poll: Will Germany Break Up Deutsche Bank?

by dbriskalert on Feb 4, 2013
It was reported by The Wall Street Journal that the German Finance Ministry, under the ruling coalition party, is planning to propose a new draft law that would break up Germany’s big banks, ring-fencing investment banking from customer deposits. Reports have also suggested that BaFin has asked DB to simulate a split of its consumer banking and trading businesses, along the lines recommended by the Liikanen group. {read more}
Deutsche Bank Year in Review: 2012
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Deutsche Bank Year in Review: 2012

by dbriskalert on Jan 15, 2013
It has been a year of transition at Deutsche Bank. After ten years as CEO, Dr. Josef Ackermann handed the reins to the world’s largest bank by asset to Anshu Jain and Juergen Fitschen at the end of May. The new co-CEOs promise “culture change” and a campaign to rebuild public trust in Deutsche. But by the end of the year, it became clear that it would be difficult for the new leaders to “escape their past” as the bank slid into “a swamp of scandal” (in the words of Der Spiegel). {read more}
Deutsche Bank capital concerns in US far from over
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Deutsche Bank capital concerns in US far from over

by dbriskalert on Sep 5, 2012
The latest DBRiskAlert report questions whether  Deutsche Bank will derive any benefit from its recent US reorganization in light of new US rules that may soon be applied to systemically important financial institutions. In April, Deutsche Bank AG reorganized its US operations for the stated purpose of avoiding new capital and liquidity standards put in place by Congress as part of Dodd-Frank Wall Street Reform and Consumer Protection Act. {read more}
Latest entries
Proposed Rule for Foreign Banks is Response to German Bank’s Negative Capital in U.S.
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Proposed Rule for Foreign Banks is Response to German Bank’s Negative Capital in U.S.

by dbriskalert on Apr 28, 2013
Comments supporting the Federal Reserve’s proposed rule for foreign banks were submitted today by UNITE HERE.  The largest of the foreign banks affected by this Proposed Rule is Deutsche Bank AG.  “We believe the German lender’s longstanding capital and liquidity issues pose a real risk to the global financial system, and that the Proposed Rule would significantly mitigate that risk while restoring competitive equality between foreign banks and domestic competitors,” said Marty Leary and Meredith Schafer in the letter to the Federal Reserve. The complete comment on the Proposed Rule can be read here. In addition, thousands of people from Hawaii to Boston have written to the Federal Reserve supporting the proposed rule and highlighting Deutsche Bank’s too-big-to-fail status. German regulators in particular have helped create the conditions necessitating enhanced prudential standards in the U.S. through resistance to higher capital and liquidity standards in the Basel discussions.  Deutsche Bank’s U.S. subsidiary... {read more}
When will Deutsche Bank stop frittering away its capital?
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When will Deutsche Bank stop frittering away its capital?

by dbriskalert on Apr 10, 2013
Last week, an article by Antoine Gara in The Street.com argued that Deutsche Bank should cut its planned dividend payments for 2013.  Recall that the bank has set a payout of €.75 per share, which the article notes exceeds the bank’s profits last year. Meanwhile, the bank’s recent earnings revision, which came about as a result of its decision to set aside an additional € 600 million for anticipated settlements of mortgage litigation and the Iran sanctions and LIBOR investigations, caused the Tier 1 capital ratio to fall from 8.0% to 7.8%.  According to Gara: Although Deutsche Bank could have minimized the capital hit of its earnings revision by cutting the dividend, the bank remains committed to a payout that would be unlikely to pass the Federal Reserve’s muster in the United States. Deutsche Bank’s rising legal costs and signs that regulatory probes may soon hit the bank’s pocket book... {read more}
New FBO rules impact on DB: No Big Deal?
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New FBO rules impact on DB: No Big Deal?

by dbriskalert on Mar 26, 2013
  During its January 31st earnings call, the bank seemed to want it both ways—objecting strongly to the imposition of the new FBO rules requiring more capital in the U.S., and yet downplaying the bank’s need to move or raise capital. From transcript of the call: Jernej Omahen, Goldman Sachs analyst: The first question I’d like to ask relates to the Fed proposal. And I have to say so, and maybe it’s me, but I’m just confused because I don’t understand whether Deutsche Bank believes this is a big deal or whether you think it’s not a big deal. Because on the one hand you’re telling us we won’t have to raise any capital as a consequence of this, it’s not going to have a meaningful impact on our operations, and on the other hand you’re telling us this is such a big deal that it’s going to spike retaliation from European... {read more}
Stop us before we model again: Is aggressive RWA modeling undermining Basel’s legitimacy?
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Stop us before we model again: Is aggressive RWA modeling undermining Basel’s legitimacy?

by dbriskalert on Feb 20, 2013
Some might argue Basel standards were intended to make life easier for “universal” banks like Deutsche Bank—creating common standards across borders for global businesses.  And according to Chris Whalen of Institutional Risk Analytics, the Basel III standards have had another, more direct, benefit for “the hopelessly insolvent” DB: “If you measure the tangible equity of the entire DB group vs. total assets, what is known as a leverage ratio, the bank has lower capital than any large US bank. Only the canard of capital to “risk weighted assets” brought to us via Basel III allows DB to keep operating.” According to Dominic Elliot of Breakingviews, published in in The New York Times Dealbook, DB’s  “fancy footwork” (i.e. changes to their internal RWA models) accounted for a quarter of the reduction in risk-weighted assets announced during the bank’s January 31st analyst call.  But is it possible the bank’s creative RWA modeling... {read more}

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