Deutsche Bank Still Faces an $83 Billion Question
The ECB is right to support the German giant’s downsizing plan, but it will need to keep a close eye on the sale of assets from Deutsche’s “bad bank.”
Enria’s legacy depends on managing the Deutsche process well.
Photographer: Simon Dawson/BloombergThe radical restructuring of Deutsche Bank AG unveiled at the start of July will be a monumental task for the lender’s senior managers. The job of the European Central Bank’s finance industry supervisors, who have to make sure the revamp goes smoothly, won’t be easy either.
Deustche’s plan is a last-ditch attempt to make sure the troubled bank avoids more serious problems in the future. The ECB will need to use its regulatory stick and carrot wisely. This means standing by the lender in its sensible efforts to downsize, but being ready to demand more capital if the attempt doesn’t go according to schedule.