Banking culture has 'completely changed' since financial crisis, Deutsche Bank CEO says

By Louis Goss

'[T]he risk culture ... of all banks, around the world, [has] completely changed.'Christian Sewing

Deutsche Bank CEO Christian Sewing has said the risk culture in the banking sector has "completely changed" since the financial crisis of 2008 as he argued moves to lift caps on bankers bonuses will not lead to excessive risk taking.

Speaking at the Global Banking Summit in London on Wednesday, Sewing said "the risk culture ... of all banks around the world, completely changed" as he dismissed the example of Credit Suisse as an "exception" to a global shift towards more risk-averse thinking.

"The risk culture and the mindset of the people changed," Sewing said. "In my view, the clear majority of the CEOs of banks now have a long-term view of stable income streams."

The Deutsche Bank (XE:DBK) (DB) lifetimer, who joined the German lender at the age of 19, in turn, argued that Europe should follow the U.K. in lifting the caps on bonuses that were imposed on banks following the financial crisis.

Introduced in 2014, the European Union's bonus cap limited bankers' payouts at rates of two times their annual salaries. In October, the U.K.'s Prudential Regulation Authority made a decision to scrap the restrictions for bankers in Britain, in a post-Brexit shakeup of EU regulations.

City minister Bim Afolami on Tuesday said that the British government would like to see a more risk-friendly approach to business, though Sewing stressed that "the potential removal of the bonus cap does not mean we can go into excessive risk taking."

"Removing the bonus cap, if this is done in most parts of the world, then this is something that we need to consider - always attached to the understanding that the risk culture in has banks clearly changed," the Deutsche Bank CEO said.

"Restrictive regulation," Sewing argued, "has contributed to the decline of European capital markets, that has seen the United States capture a greater market share."

"At the end of the day we need a level playing field," Sewing said. "I'm completely in favor of regulation that ensures the robustness and soundness of banks, that at same time puts us in a competitive position."

-Louis Goss

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11-29-23 1216ET

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