German government would welcome smaller Deutsche Bank

Angela Merkel Speaks

Germany would welcome a smaller Deutsche Bank as a way to reduce the lender’s capital requirements, three government officials said.

Bloomberg News reports that Chancellor Angela Merkel’s government views favorably a structural overhaul that may include shrinking the U.S. operations and sees reducing the investment banking business as a viable way to curb risk and capital requirements, said the officials, who asked not to be identified discussing the private deliberations. A German Finance Ministry spokesman declined to comment. Pulling back in the U.S. is one option being considered as part of Deutsche Bank’s broader strategy review, said two others familiar with the lender’s plans.

"Since the outbreak of the financial crisis, the goal of our regulation has been to reduce the risks on the balance sheets of banks,” Antje Tillmann, a senior lawmaker on the German parliament’s finance committee for Merkel’s Christian Democratic Union, said in an e-mail to Bloomberg. “Measures that support this goal, but don’t harm the export-oriented German economy, should be openly discussed."

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Germany Said to Welcome Proposal to Create Smaller Deutsche Bank

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