New FBO rules impact on DB: No Big Deal?
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}
Be Careful What You Wish For
In April 2012, Deutsche Bank submitted comments to the Federal Reserve recommending that U.S. subsidiaries of foreign banks be categorized as “intermediate holding companies” (IHCs) and remain exempt from the capital and liquidity requirements of Dodd-Frank. As we pointed out at the time, this proposal might have been the only way for the bank to reap the benefits of the recent reorganization of its U.S. holding company Taunus, which had been undertaken explicitly to avoid the capital and liquidity rules mandated by the Collins Amendment. By deregistering Taunus as a bank holding company in February 2012, the bank had perhaps postponed its day of reckoning with the Collins Amendment. {read more}
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}
Deutsche Bank capital concerns in US far from over
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}
