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Deutsche Bank

03 Jun

       The existence of a branch office of a foreign bank in Indonesia has been through a long historical process. At the beginning of the New Order, the Presidium of the Ampera Cabinet instructed the Ministry of Finance and Central Bank Governors to give business licenses to some foreign banks to operate in Indonesia. Instruction in the number of foreign banks are limited by the principle of reciprocity and the role of the country of origin of foreign banks in question as a source of foreign investment and economic assistance or resources. Reason beroparasi permissibility of foreign banks in Indonesia at that time, so that foreign banks can participate and facilitate the entry of foreign investment and the implementation of the import / export in Indonesia, development and production of domestic industries and the expansion of employment opportunities and increased productivity for the national potential.

       State Minister of Economy on February 20, 1968 stating that all government agencies, entrepreneurs and niagawan showed a positive attitude towards the presence of foreign banks. In such a positive attitude, including the attitude to avoid and circumvent policy and regulatory maze and does not guarantee job security for foreign banks and violated the principles of common banking. Priori restrictions such as in terms of current accounts, deposits, and credit will narrow the activities of foreign banks so inadequate compared with the risks they face in operating in Indonesia.

       Based on the Government Regulation 11 foreign banks to get permission for doing business in Indonesia which consists of 10 bank branches located outside the country and one joint venture bank. Ten foreign bank branch is National City Bank of New York that turned into Citibank, Bank of America, Chase Manhattan Bank, American Express Bank, The Chartered Bank which later became Standard Chartered, Algemene Bank Nederland which later became ABN-Amro, Deutsche Bank, Hong Kong and Shanghai Banking Corporation (HSBC), Bank of Tokyo-Tokyo turned into Mitsibishi Bank and Bangkok Bank. While banks are Bank of mixture is a mixture of PT Bank Perdania.
(Reference: http://zulsitompul.wordpress.com/2011/04/18/bank-asing/)

       Of some foreign banks which operating in Indonesia, one of which is Deutsche Bank. Deutsche Bank AG (literally “German Bank”; pronounced [ˈdɔʏtʃə ˈbaŋk]) is a German global banking and financial services company with its headquarters in the Deutsche Bank Twin Towers in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia-Pacific and the emerging markets. In 2009, Deutsche Bank was the largest foreign exchange dealer in the world with a market share of 21 percent.

       Deutsche Bank has offices in major financial centres including London, New York City, Singapore, Hong Kong, Tokyo, Paris, Moscow, Sydney, Toronto, Istanbul, Madrid, Dublin, Amsterdam, Warsaw, Mumbai, Kuala Lumpur, São Paulo, Dubai, Riyadh, Bangkok, Karachi, Belgrade, Manila and George Town (Cayman Islands).

       The bank offers financial products and services for corporate and institutional clients along with private and business clients. Services include sales, trading, research and origination of debt and equity; mergers and acquisitions (M&A); risk management products, such as derivatives, corporate finance, wealth management, retail banking, fund management, and transaction banking.

      Deutsche Bank’s Chief Executive Officer and Chairman of the Group Executive Committee is Josef Ackermann since May 2002. He agreed at the end of 2009 to continue as chief executive for another three years until 2013. On 26 July 2011, along with its second quarter earnings report, Deutsche Bank reported that Anshu Jain, head of investment banking and Juergen Fitschen, head of the German business, will replace Josef Ackermann as co-CEOs starting in 2012.Fears that Deutsche Bank could neglect its German roots and expand risk-taking activities prompted key members of the supervisory board to opt for the dual CEO model. Deutsche Bank is listed on both the Frankfurt (FWB) and New York stock exchanges (NYSE).

Housing credit bubble and CDO market

Deutsche Bank was one of the major drivers of the collateralized debt obligation (CDO) market during the housing credit bubble from 2004–2008, creating ~$32,000,000,000 worth. The 2011 US Senate Permanent Select Committee on Investigations report on Wall Street and the Financial Crisis analyzed Deutsche Bank as a ‘case study’ of investment banking involvement in the mortgage bubble, CDO market, credit crunch, and recession. It concluded that even as the market was collapsing in 2007, and its top global CDO trader was deriding the CDO market and betting against some of the mortgage bonds in its CDOs, Deutsche bank continued to churn out bad CDO products to investors.

       The report focused on one CDO, Gemstone VII, made largely of mortgages from Long Beach, Fremont, and New Century, all notorious subprime lenders. Deutsche Bank put risky assets into the CDO, like ACE 2006-HE1 M10, which its own traders thought was a bad bond. It also put in some mortgage bonds that its own mortgage department had created but couldn’t sell, from the DBALT 2006 series. The CDO was then aggressively marketed as a good product, with most of it being described as having A level ratings. By 2009 the entire CDO was almost worthless and the investors (including Deutsche Bank itself) had lost most of their money.

       Gregg Lippman, head of global CDO trading, was betting against the CDO market, with approval of management, even as Deutsche was continuing to churn out product. He was a large character in Michael Lewis’ “The Big Short“, which detailed his efforts to find ‘shorts’ to buy Credit Default Swaps for the construction of Synthetic CDOs. He was one of the first traders to foresee the bubble in the CDO market as well as the tremendous potential that CDS offered in this. As portrayed in the book “The Big Short” of Michael Lewis, Lipmann in the mid of the CDO and MBS frenzy was orchestrating presentations to investors, demonstrating his bearish view of the market, offering them the idea to start buying CDS, especially to AIG in order to profit from the forthcoming collapse. As regards the Gemstone VII deal, even as Deutsche was creating and selling it to investors, Lippman emailed colleagues that it ‘blew’, and he called parts of it ‘crap’ and ‘pigs’ and advised some of his clients to bet against the mortgage securities it was made of. Lippman called the CDO market a ‘ponzi scheme’, but also tried to conceal some of his views from certain other parties because the bank was trying to sell the products he was calling ‘crap’. Lippman’s group made money off of these bets, even as Deutsche overall lost money on the CDO market.

        Deutsche was also involved with Magnetar Capital in creating its first Orion CDO. Deutsche had its own group of bad CDOs called START. It worked with Elliot Advisers on one of them; Elliot bet against the CDO even as Deutsche sold parts of the CDO to investors as good investments. Deutsche also worked with John Paulson, of the Goldman Sachs Abacus CDO controversy, to create some START CDOs. Deutsche lost money on START, as it did on Gemstone.

(Reference:https://en.wikipedia.org/wiki/Deutsche_Bank)

CorporateBanking&Securities

Corporate Banking & Securities comprises Markets and Corporate Finance divisions. Markets division combines the sales, trading and structuring of a wide range of financial market products, including bonds, equities and equity-related products, derivative products traded on inside and outside the exchange, foreign exchange, money market instruments, securitized instruments and commodities.
Corporate Finance Division is responsible for mergers and acquisitions, including acting as adviser (advisory), the issuance of debt and equity, as well as the scope of capital markets for large and medium enterprises. The team that is focused on industry and region ensure the availability of the entire range of financial products and services.

Global Transaction Banking division

Global Transaction Banking division provides commercial banking products and services to corporate clients and financial institutions around the world, including the payment of domestic and cross-country, cash management, risk mitigation and financing international trade, as well as trustee services, agency, storage, custody, and related services.

Asset & Wealth Management

Global Transaction Banking division provides commercial banking products and services to corporate clients and financial institutions around the world, including the payment of domestic and cross-country, cash management, risk mitigation and financing international trade, as well as trustee services, agency, storage, custody, and related services.

(Reference: http://www.deutsche-bank.co.id/indonesia/index.html)

 
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Posted by on June 3, 2013 in Uncategorized

 

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