Deutsche’s Fine

Time for a Rethink

  • Why it matters

    Why it matters

    The author argues that U.S. financial regulators are treating Deutsche Bank more harshly than its U.S. rivals, endangering the entire global financial system in the process.

  • Facts

    Facts

    • The penalties imposed by the U.S. Justice Department date back to the bank’s actions during the mortgage scandal almost 10 years ago.
    • The fine initially proposed for Deutsche Bank was $14 billion, it emerged last week in a leak.
    • In most cases, the actual penalties paid by banks investigated by the Justice Department were much lower than the amounts initially proposed.
  • Audio

    Audio

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CEO of Deutsche Bank John Cryan speaks during of the bank's annual shareholders meeting in Frankfurt, Germany, Thursday, May 19, 2016. (AP Photo/Michael Probst)
John Cryan’s battle with the U.S. Justice Department is only beginning, but the damage may have already been done. Source: AP Photo/Michael Probst

 

Just to be clear, this article is not intended as a defense of Deutsche Bank. It is no exaggeration to say that Germany’s largest bank has lost its moral compass in the last two decades.

Too many of the bank’s employees have forgotten what the bank’s legendary chairman, Alfred Herrhausen, once wrote: “In the long term, you can only sell products that have a good reputation.”

The bank gambled away its reputation some time ago, and its products are not selling well. Some of its bankers have repeatedly lied, enriched themselves, and cheated and manipulated people.

Given Deutsche Bank’s past, it would be easy to say that the bank has only itself to blame for the U.S. Department of Justice’s tough approach in a mortgage scandal that happened almost 10 years ago.

But that’s only part of the story, because Deutsche Bank has since mended its ways.

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