Deutsche Bank AG (DBK) executives who last year worked on a code by which to lead the company were split over whether to include innovation as one of their values after the development of complex products helped cause the financial crisis, said co-Chief Executive Officer Anshu Jain.
“One of our colleagues stepped up and said ‘wait a second, we’ve always seen ourselves as very innovative, shouldn’t innovation be a core value?’ Then an almighty discussion broke out,” Jain said in a speech in Frankfurt today. “Half our group said ‘wait a second, wasn’t it innovation that led to half the problems that we face?’ The answer, of course, was yes.”
Five years after the collapse of Lehman Brothers Holdings Inc. roiled markets, bankers are trying to convince consumers, corporations and regulators that they’re working for clients and not solely their own profit. Jain, an investment banker who took over as co-CEO with Juergen Fitschen last year, published six values to stoke “cultural change” at Deutsche Bank in July.
“We came to the conclusion that to define Deutsche Bank or indeed any financial institution without making innovation a core value would be a mistake,” Jain said. “We’re very keen to focus innovation on solving client needs” such as the need to meet pension obligations, which is creating a major problem for many corporations, he said.
Jain cited the repackaging of loans, a process known as securitization, as an example of financial innovation that brought “tremendous financial prosperity” as well as sparking the turmoil of the subprime debt crisis.
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