Joerg BONGARTZ, Chairman of the Board of the Deutsche Bank

Deutsche Bank
Regional Management
Russian Economic and Financial Forum
Joerg Bongartz, Chairman of the Board of Deutsche Bank Russia
Baden-Baden, 27th November 2011
The financial industry has become the subject of
particular scrutiny and criticism
Nature of financial
markets
— Indeed imperfect (herd behaviour, exaggerations)
— But tend to get at least the right trend
Market structures
— Growing weight of passive investment strategies
— High Frequency Trading provides liquidity but can
have harmful effects
Financial products
— Systemic implications?
— Derivatives mitigate global firms’ FX-, interest rate
and commodity price risks
Size of the
financial sector
Deutsche Bank
Regional Management
26/12/2011 2:22:39 PM
— SIFIs per se are not the problem but
— Interconnectedness of a financial institution
— Complexity to orderly winding it down
— Strong banks are needed in a global economy
Joerg Bongartz
Russian Economic and Financial Forum in Germany, Baden-Baden, 27th November 2011
2010 DB Blue template
1
Banks are multilaterally affected by the debt crisis
Directly
Indirectly
Via their exposures with
debtors
Refinancing costs closely Investors suspect that the
correlate with interest
financial sector will face
rates on national debts
notable financing
burdens
Risk of tax increases
Limited growth outlook
― Currently:
- private households have to decrease debts
- major growth drivers (mortgages, consumer loans) are
dropping out for the time being
― Structurally: trend growth rate in developed countries is declining
reaction:
- growth in market shares and/or
- expansion in other regions of the world
― Effects of regulation
― Costs of business are increasing and have to be backed with more capital
Deutsche Bank
Regional Management
26/12/2011
Joerg Bongartz
Russian Economic and Financial Forum in Germany, Baden-Baden, 27th November 2011
2010 DB Blue template
2
Recommendations to balance right between
strengthening financial stability and preserving growth
Stress tests
(algorithmic
trading
systems)
Circuit
breakers
Encourage
long-term
investments
Risk
assessment
(new
products)
Avoid
discouraging
long-term
investments
Broad range of investors
and investment styles
Stabilise investment
flows
Identify risks from new
financial products
Macroprudential
supervision
Deutsche Bank
Regional Management
26/12/2011
Joerg Bongartz
Russian Economic and Financial Forum in Germany, Baden-Baden, 27th November 2011
2010 DB Blue template
Market (infra)
structures &
recovery
regimes
3
Appendix
Deutsche Bank
Regional Management
26/12/2011
Joerg Bongartz
Russian Economic and Financial Forum in Germany, Baden-Baden, 27th November 2011
2010 DB Blue template
4
Deutsche Bank in Russia
Deutsche Bank Ltd
(Russia) was established
Deutsche Bank acquired
40% stake
in UFG
Deutsche Bank got license
to open first representative
office of a foreign bank in
Moscow
Deutsche Bank and
Strabag create real estate
joint venture
Started to offer Private
Wealth Management
Services
Deutsche Bank
Regional Management
26/12/2011
Representative office in St.
Petersburg opened
Deutsche Bank
establishes GT
Group in
Russia
Deutsche Bank AG led the
first major large German
USSR export finance
consortium
Deutsche Bank AG
acquired stake in the
Russian Bank for Foreign
Trade in St. Petersburg;
issues the first Russian
Railway bonds
Deutsche Bank fully
acquired UFG AM
Deutsche Bank acquired
remaining 60% in UFG
Deutsche Bank AG
managed the financing of
metal pipes supplied for
the gas line from Russia to
Europe
— 10th anniversary of GT
Group in Russia
— Move into 7,000sqm
office space on Nordstar
Tower
— GT staff exceeds 800
full-time employees
Joerg Bongartz
Russian Economic and Financial Forum in Germany, Baden-Baden, 27th November 2011
2010 DB Blue template
5