Ann Pettifor

Deutsche Bank – the idolatrous bank

Deutsche Bank, according to its website, has ‘a passion to perform’. Visitors are invited to download its ‘empowering logo’ on to their computer monitors.  Its managers are empowered to extract from customers/clients a profit goal of 25% per annum.

In January this year (see my blog of that month) Bishop Wolfgan Huber, leader of the German Evangelical Church attacked the CEO of Deutsche Bank for this goal, arguing that given the role that bankers had played in bringing about the current crisis “Never again should a Deutsche Bank chief executive set a profit goal of 25 per cent.” Such goals drove up profit expectations to unsustainable levels and amounted to “a form of idolatry”, he said. “In the current circumstances, money has become a god.”

Josef Ackermann, Deutsche Bank’s CEO reacted angrily, dismissing the bishop’s remarks as ‘inappropriate’.

A couple of months later, on the 31st March 2009, at  a board meeting of one of Russia’s micro finance NGOs, one of their lenders, Deutsche Bank, used a ‘force majeure’ clause in their contract to announce, without further discussion, that they were changing the basis on which the loan interest was calculated.

This would rise from the Russian inter-bank rate to ‘their own rate’.   In other words, the cost of interest on the loan rose from 18% to a staggering 34.5%.

The micro-finance institution was told that if its manager refused to sign an amended contract, Deutsche Bank would call the loan in early.

If having signed, they wanted to repay early, this would trigger penalties, calculated on a basis that would remain a commercial secret, but would amount to about 3 million rubles.

Money is a god to this bank, and community micro-finance organisations in struggling Russia, nothing but the burnt offerings made as sacrifices to this god.

What is at risk now for Deutsche Bank, is not only the loan owed by the micro-finance institution, but also the bank’s reputation. Do they care?


1 thought on “Deutsche Bank – the idolatrous bank”

  1. Disgusting. Obama sees glimmers of hope, Brown sees green shoots, I see BS. The model is

    unsustainable and has been resurrected as a zombie economy – dead institutions that refuse to lie down imagining themselves to be reborn. Are

    there any politicians anywhere who understand the game is over and it’s time for a new game with new rules?

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