Posts tagged "Liikanen Review"
Stop us before we model again:  Is aggressive RWA modeling undermining Basel’s legitimacy?

Stop us before we model again: Is aggressive RWA modeling undermining Basel’s legitimacy?

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}
Poll: Will Germany Break Up Deutsche Bank?

Poll: Will Germany Break Up Deutsche Bank?

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

Deutsche Bank Year in Review: 2012

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}
Should European Regulators Break Up Deutsche Bank?

Should European Regulators Break Up Deutsche Bank?

Recently, Sandy Weill, former Citigroup Chairman and CEO and long-time advocate of “universal banking,” stunned the U.S. financial world when he urged the break-up of “too-big-to-fail” banks in order to prevent future taxpayer-funded bank bailouts. It appears the same sea-change may be  emerging in Europe as regulators there consider structural reforms that could force Deutsche Bank and other large European banks to break up, or at least to create firewalls that could insulate their commercial banking operations from their comparatively higher leveraged investment banking units. {read more}