Deutsche Bank AG Co-Chief Executive Officer Juergen Fitschen, who was included in a German tax-evasion probe last week, said lenders that fail to keep the trust of their clients will disappear.
“We’re criticized, and rightly so,” Fitschen, 64, said yesterday in a speech in the western German city of Essen. “In the long term, it’s the clients that decide if a bank survives.”
Global regulators are slapping banks with fines for past infractions that range from lying about their borrowing costs to giving terrorists and drug cartels access to the U.S. financial system. Fitschen has come under fire from politicians after he made a call to a senior lawmaker last week, when investigators raided Deutsche Bank offices as part of a probe into fraud in the carbon market.
“We have to anchor responsibility more strongly for every one of the bank’s employees, controlled by the group and demonstrated by management,” Fitschen said of his efforts to instill “culture change” at Deutsche Bank and its peers. “We want to implement this, regardless of the fact that we have a past which we have to work off and that’s making headlines.”
Deutsche Bank said Dec. 16 that it will investigate prosecutors’ allegations that employees deleted e-mails requested as part of the tax-evasion probe. Fitschen and Chief Financial Officer Stefan Krause, 50, are among 25 people being investigated because they signed the firm’s 2009 tax declaration, according to the Frankfurt-based company.
Fitschen called Volker Bouffier, the prime minister of the state of Hesse, where Frankfurt is located, Christian Streckert, a spokesman for Deutsche Bank, said on Dec. 16. He declined to say what they discussed.
Fitschen said in an interview with German newspaper Handelsblatt on Dec. 13 that he felt “unfairly treated” and that the prosecutor’s approach was “excessive.” Fitschen regrets the call to Bouffier, Sueddeutsche Zeitung reported yesterday, citing unidentified people familiar with the matter.
It would be “incredible” if Fitschen had complained to Bouffier about the Frankfurt General Prosecutor, Hesse Deputy Premier and justice minister Joerg-Uwe Hahn said today in Bild-Zeitung, Germany’s best-selling newspaper.
Bouffier is a member of Chancellor Angela Merkel’s ruling Christian Democratic Union, while Hahn is a Free Democratic Party lawmaker. The FDP is also a junior coalition member in the federal government.
While opposition lawmakers have criticized Fitschen’s phone call before next year’s federal elections, he wasn’t criticized by Peer Steinbrueck, the Social Democratic Party’s candidate for chancellor, who shared the panel with him in Essen yesterday. The conference was organized by companies based in the Ruhr region, Germany’s industrial heartland.
Steinbrueck, who has called for Deutsche Bank to split its securities unit from its retail bank to protect depositors, focused his remarks on Germany’s exit from nuclear power and European integration. The SPD is Germany’s largest opposition party.
Fitschen, who also addressed imbalances between capital rules for lenders in the U.S. and Europe and the role of emerging markets in the global economy, said banks must be allowed “to develop and innovate like other industries.”
“I’d ask you, especially in the tough times, to trust banks not to repeat what happened before the crisis, to trust that we will work for a new normality with the regulators who set the rules and our clients,” Fitschen said. “No business, even if it is legal, is good enough if it shakes our trust.”