Reuters reports on Deutsche Bank CEO Josef Ackermann:
“Growth, especially of private consumption in the United States, will suffer because of the housing crisis and that can naturally not go without negatively affecting the world economy overall,” Josef Ackermann said in a guest column to be published in the German business daily Handelsblatt on Monday. Handelsblatt made a summary of Ackermann’s text available to other media at the weekend. Ackermann said many banks and investors affected by the credit market turmoil that arose in the wake of the subprime crisis had apparently taken risks that exceeded their size and risk-bearing capacity. “This is, to say it clearly, above all negligence on the part of the managements of these houses,” he said. The distribution of credit risks in the international financial system had not been transparent to supervisory authorities and market participants, he said. Deutsche Bank has shut down its proprietary credit trading desk in London and is laying off some of the 14-strong team, a source familiar with the matter said on Friday.
While it’s nice to see some of the larger investment banks putting some much-needed emphasis on the issue of market transparency — probably the core issue behind much of this mess to begin with — I can’t help but feel that his comments are far too late. It’s not exactly news, after all, that the housing crisis will affect the world economy; it’s already begun.
