by STEFAN STEINBERG
Germany’s leading bank, Deutsche Bank, has posted its second highest ever quarterly profits. Deutsche Bank earned a net income of €2.1 billion ($3.1 billion) in the first three months of this year with pre-tax profits of €3.5 billion. This means that the bank is on target to fulfil the aim of Deutsche Bank Chairman Josef Ackermann to make a profit of €10 billion for the operational year of 2011.
The latest figures for Deutsche Bank reflect the growing power and influence of a small number of major international banks. Following the collapse of Lehmann Brothers in 2008, it was argued by the US government and governments across the globe that leading banks were “too big to fail”, and that it was necessary to pump trillions into these banks in order to prevent a breakdown of the financial system.
Now, nearly three years, later a number of the main players responsible for the financial crash, including Deutsche Bank, are bigger and more powerful than ever. Commenting on this development in an interview with a German paper last month, former chief economist at the International Monetary Fund, Simon Johnson, described Josef Ackermann as “one of the most dangerous bankers in the world”.
Johnson criticised in particular Ackermann’s proclaimed target of an average annual profit of 25 percent. Such projected profit levels, Johnson argued, were only possible because Ackermann was well aware that his bank would be “rescued by taxpayers” in the event of difficulties.
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