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Josef Ackermann CEO Deutsche Bank is bluffing

By Amarendra Bhushan for CEOWORLD Magazine Updated:November 3, 2008

Deutsche Bank chief Josef Ackermann said Sunday, Nov. 2, that Germany’s biggest bank has no plans to take advantage of a government rescue plan for its troubled financial sector.

Deutsche Bank AG , Germany’s largest bank by market capitalization, won’t tap the German government’s EUR500 billion rescue fund for banks, Chief Executive Josef Ackermann reiterated on German television channel ZDF Sunday.

“From today’s perspective, we won’t take part, because we are strong,” Ackermann said in a video made available on the TV channel’s Web site ahead of the broadcast of the interview.
Deutsche Bank has a strong refinancing basis and therefore won’t need to use the fund, Ackermann said.

Banks that are “truly weak and must be rescued” should use the rescue fund “as soon as possible,” he said.

And banks that are still in a good position, but have a capital ratio that isn’t sufficient by international standards should either raise capital via the market or tap the rescue fund, he said. However, banks that are strong should “do it on their own” without the help of the taxpayer, Ackermann said.

The government’s financial markets stabilization fund is crucial for strengthening weak banks, and it is important to have a functioning, stable financial system, Ackermann said.
“We like good, strong competitors,” Ackermann said.

Ackermann declined to comment specifically on his relationship to the German government, and Chancellor Angela Merkel, following the government’s sharp criticism of his reported comments that it would be shameful for Deutsche Bank to take state money even though he had initially called for a sector-wide state rescue package similar to the one enforced in the U.S.

“You can assume that a mutual trust that has been there before doesn’t break apart that quickly,” Ackermann said. On Oct. 20, German government spokesman Thomas Steg called Ackermann’s reported statements “extremely objectionable, incomprehensible and unacceptable” and said the comments caused objections in Monday’s cabinet meeting. Ackermann acknowledged that banks’ bonus systems are often too short-term oriented, which, he said, must change.
Asked whether he recently thought about resigning, Ackermann emphasized his commitment to stay at the helm of the bank. “It goes without saying that I will stay here,” Ackermann said.

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