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Dr. Josef Ackermann

Investment banking model here to stay, says Ackermann
February 13, 2009

The world’s investment banking models are here to stay, according to Dr. Josef Ackermann, CEO and Chairman of the Management Board of Deutsche Bank AG.

Speaking in an interview broadcast on CNBC, Ackermann said there were still a lot of “very good businesses” within investment banks, but felt that business models would adapt to reflect changing needs in the years ahead.

“I think the (financial crisis) losses came primarily from the illiquid, high-risk activities,” he explained. “Most banks, including Deutsche Bank, have closed these dedicated desks and have not re-entered this business. That means that part of investment banking will be different.”

On additional funding for banks, Ackermann said. “If you don’t need money from governments or sovereign wealth funds, you should not take it.” He added that Deutsche Bank was very much trying to manage its own destiny and that he believed it was also important to remain independent for clients, as well as for “the culture of the Bank”.

Asked if there was a need for a ‘bad bank’ concept to be introduced, Ackermann said he didn’t believe a central bad bank would be affordable. However, he felt “much less money” would be lost if there was a government or central bank funded scheme that enabled banks to get rid of some toxic assets.

“I think to help banks get rid of this terrible burden (toxic assets) will be the only way to restore confidence in the financial system," Ackermann concluded.
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