Deutsche Bank AG (DBK) co-Chief Executive Officer Anshu Jain backed German Chancellor Angela Merkel’s calls for European states to implement austerity measures and said banks must renew their “contract with society” in his first public speech leading the country’s largest lender.
“I don’t believe that deficit spending is the right path for Europe,” Jain said today in a speech at a conference in Berlin organized by Merkel’s Christian Democratic Union. “To advocate a policy of austerity is, simply, to have the courage to recognize reality.”
Jain, a native of India and investment banker, threw his support behind Merkel’s policies as he seeks to woo German politicians, citizens and companies and keep Deutsche Bank among the top global banks. The firm, a pillar of the Germany’s corporate landscape, benefits from being anchored in its home market, Jain said in English after initially addressing delegates at the conference in German.
“Banks have fallen from grace” following the 2008 financial crisis after engaging in excessive risk-taking, Jain said. “We in the banking industry must also face up to the biggest challenge of all: renewing our contract with society.”
While increased regulation as a consequence of that crisis was “inevitable,” Jain reiterated calls by former Deutsche Bank CEO Josef Ackermann for banks to be subject to the same rules as their competitors in other countries.
Jain, 49, the former head of the company’s investment bank, succeeded Ackermann at the end of May together with Germany chief Juergen Fitschen. Pairing the two is an attempt to bridge Deutsche Bank’s roles as an investment bank that vies with Wall Street firms such as Goldman Sachs Group Inc. and a Frankfurt- based lender to German companies.
The co-CEO, who shared a podium today with German Finance Minister Wolfgang Schaeuble, reiterated that Deutsche Bank is “committed” to its so-called universal bank model of investment bank and retail operations under one roof.
While Europe has avoided a “systemic event,” risks remain such as those related to the outcome of Greece’s election next week, said Jain.
Spain’s request over the weekend for European Union aid for its banks was an “example of a well-orchestrated response to what had become a source of great concern,” Jain said.
“We are living through the most severe financial crisis since the birth of modern Europe,” he said. “No single European country can hold its own against the U.S.A. or China. To succeed, we must integrate further. The outcome is still to be decided. There is no doubt in my mind: Europe can recover, and emerge stronger, from this crisis.”
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