How do you perceive DBs outlook in view of Basel III, the global financial crisis and the euroarea

problems?
How would you restructure DB in view of the challenges posed by Basel III?
Washington Post
The big idea: For banks, the accelerated trend in globalization meant they had to provide a range of
commercial and investment banking services to clients, and they had to do so in all the places their
customers were doing business. Increasingly, customers banked outside of their home countries.
Additionally, most investment banking activities, especially sales and trading, benefited from
economies of scale, so banks became more profitable as the volume of services and transactions
they provided increased.
As big banks became a one-stop shop, increased leveraging in the sector contributed to higher
returns during the boom and deeper financial troubles during the 2008 global financial crisis. The
response was a revised global banking regulatory framework Basel III. It aimed to make the
global financial system safer by increasing bank capital and liquidity requirements, among other
things. Basel III could fundamentally change the banking industry landscape.
The scenario: Deutsche Bank engaged in investment banking activities (sales and trading,
origination, advisory, etc.) through its corporate and investment banking division, as well as loan
and deposit services through its commercial division. When Basel III regulation was agreed on in
2010, Deutsche Bank was a global institution with much of its revenue coming from outside
Germany and generated from investment banking operations.
For investors, Basel III raised concerns that Deutsche Bank would need to issue fresh equity capital
to meet the requirements, thereby diluting the value of existing shares. In addition, profitability in
the banking sector had declined steadily since the crisis, and investors worried that stricter
requirements would further reduce profitability. It needed alternative ways to profit. But how?
The resolution: Deutsche Bank reduced leverage between 2007 and 2011, thereby starting to
address capital concerns. In 2010, it acquired Deutsche Postbank, a German private-sector retail
bank. Postbank strengthened Deutsche Banks deposit base and gave it an alternative revenue
source.
In addition to strengthening its retail banking presence in European markets, Deutsche Bank used
the downturn in investment banking to gain market share as many competitors were forced to exit
the business. By July 2012, Deutsche Bank had the largest market share in U.S. fixed-income
trading, beating JPMorgan Chase.
The lesson: Strategically, the 2010 Postbank acquisition provided Deutsche Bank with low-cost
funding and brought its business model closer to global peers. The new regulatory environment
created areas of the business that are more attractive and others that are less so. Banks would
have to weigh the impact on their traditional strengths.

Financial Times
The big idea: For banks, the accelerated trend in globalization meant they had to provide a range of
commercial and investment banking services to clients, and they had to do so in all the places their
customers were doing business. Increasingly, customers banked outside of their home countries.
Additionally, most investment banking activities, especially sales and trading, benefited from
economies of scale, so banks became more profitable as the volume of services and transactions
they provided increased.
As big banks became a one-stop shop, increased leveraging in the sector contributed to higher
returns during the boom and deeper financial troubles during the 2008 global financial crisis. The
response was a revised global banking regulatory framework Basel III. It aimed to make the
global financial system safer by increasing bank capital and liquidity requirements, among other
things. Basel III could fundamentally change the banking industry landscape.
The scenario: Deutsche Bank engaged in investment banking activities (sales and trading,
origination, advisory, etc.) through its corporate and investment banking division, as well as loan
and deposit services through its commercial division. When Basel III regulation was agreed on in
2010, Deutsche Bank was a global institution with much of its revenue coming from outside
Germany and generated from investment banking operations.
For investors, Basel III raised concerns that Deutsche Bank would need to issue fresh equity capital
to meet the requirements, thereby diluting the value of existing shares. In addition, profitability in
the banking sector had declined steadily since the crisis, and investors worried that stricter
requirements would further reduce profitability. It needed alternative ways to profit. But how?
The resolution: Deutsche Bank reduced leverage between 2007 and 2011, thereby starting to
address capital concerns. In 2010, it acquired Deutsche Postbank, a German private-sector retail
bank. Postbank strengthened Deutsche Banks deposit base and gave it an alternative revenue
source.
In addition to strengthening its retail banking presence in European markets, Deutsche Bank used
the downturn in investment banking to gain market share as many competitors were forced to exit
the business. By July 2012, Deutsche Bank had the largest market share in U.S. fixed-income
trading, beating JPMorgan Chase.
The lesson: Strategically, the 2010 Postbank acquisition provided Deutsche Bank with low-cost
funding and brought its business model closer to global peers. The new regulatory environment
created areas of the business that are more attractive and others that are less so. Banks would
have to weigh the impact on their traditional strengths.