The chief executive said that the bank plans to go much further than EU regulations mandate on leverage – the ratio governing how much they can lend relative to their capital base.
“The three per cent current European leverage standard, which is enshrined in CRD4, to us is probably not a prudent enough standard,” he told the Bank of America Merrill Lynch insurance and chief executives conference in London yesterday. “So what we are trying to do is attempt a recalibration of our balance sheet, and we’ve committed to a €250bn (£126bn) reduction of our balance sheet to create a buffer to current European standards.”
That is in stark contrast to the UK where banks have been under intense pressure from the regulators to improve their leverage ratios by raising more capital – though it can also suppress lending.
Jain also said he wants to make Deutsche a world leader in wealth management, a trend which has grown in Europe as such activities are less capital intensive than some other investment banking businesses.