Bloomberg News

Deutsche Bank’s Ackermann Urges Private Financing for Greece

September 24, 2011

(Updates with comments starting in the sixth paragraph.)

Sept. 24 (Bloomberg) -- Deutsche Bank AG Chief Executive Officer Josef Ackermann said that Greece needs private-sector financing and European officials must act swiftly to stabilize the region’s economy.

“Policy makers need to move beyond ad hoc financial responses to address fundamental issues about the nature of European monetary and economic integration,” Ackermann said today, addressing the Institute of International Finance’s annual meeting in Washington.

As Greece’s prospects darken and the 18-month debt crisis threatens to tip Europe and the global economy back into recession, euro-area managers are stepping up efforts to identify measures that can contain the contagion. Commodities fell to a nine-month low yesterday and emerging-market stocks dropped the most in three years on concern the global economy is losing momentum and policy makers will fail to spur growth.

Ackermann, 63, said he welcomed pronouncements by European leaders who said they will more closely coordinate their economic policies.

“The challenge lies in implementing these decisions in a timely fashion that convinces financial markets,” he said.

Private-sector involvement in securing financing for Greece will also be “key,” said Ackermann, who has been chairman of the Institute of International Finance since 2003. The IIF announced today that Ackermann will step down in June 2012 and be replaced by HSBC Holdings Plc Chairman Douglas Flint.

Pensions, Deficit

Greece has already made substantial progress in reforming its pension system and reducing its budget deficit, Ackermann said. While private banks will provide a critical role in supporting economic recovery, he said, “policy makers must reduce the barriers that inhibit our ability to do so when we are faced with the dual challenges of meeting new regulatory requirements on the one hand and managing growing funding challenges on the other.”

Weak market conditions, especially those driven by sovereign debt risk, are pressuring bank-funding costs, he said. The industry is also grappling with tighter capital standards from the Basel Committee on Banking Supervision.

Ackermann joined JPMorgan Chase & Co. CEO Jamie Dimon, 55, in criticizing a proposal requiring the largest global banks to hold an additional buffer of about 2.5 percent of risk-weighted assets. He questioned the need for additional liquidity requirements, calling them excessively conservative and complex.

“Liquidity standards are vital, but the uncertainties created by the unfinished proposals that we are confronting are increasingly disruptive,” he said. “We need simple, clear, appropriate liquidity standards -- not standards that are unrealistically conservative or unmanageably complex.”

The IIF voted today to create a new committee on governance and industry practices, devoted to corporate governance, risk management and compensation issues.

--Editors: Dan Reichl, Kevin Costelloe

To contact the reporter on this story: Dawn Kopecki in New York at dkopecki@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net


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