The manager will also lead the US business in the future.
(Photo: imago/Sven Simon)
frankfurt Deutsche Bank’s recent management board reshuffle has raised questions for the European Central Bank’s (ECB) banking watchdog. Handelsblatt has learned from the financial world that the dual role of board member Stephen Simon is sparking discussions between the central bank and Deutsche Bank. On the Institute’s Board of Directors, Simon is responsible, inter alia, for compliance, ie compliance with all rules and regulations of the bank. He has also been in charge of the U.S. business since May.
According to people familiar with the matter, this involves whether Simon, as a compliance officer, is personally responsible for the business and whether there is a conflict of interest. Negotiations between the bank and the regulator should resolve how precisely Simon’s role as US boss is defined and whether the dual role will be permanent or temporary. But it is unclear whether the status quo will change.
Deutsche Bank said it generally does not comment on discussions with regulators. ECB supervisors were not available for comment.
It was not for nothing that the bank sent Simon to the US, where he was in charge of relations with regulators in addition to compliance. Relations with U.S. regulators have been strained for years.
Improvement is the Institute’s top priority. Beyond that, U.S. regulators are frustrated that the Deutsche Bank manager in charge of the U.S. has so far had no direct influence on the improvement of the control system.
Deutsche Bank differentiates mandate
More recently, Deutsche Bank made a distinction between so-called “infrastructure” tasks, such as treasury, risk management or compliance, and those with business responsibility, such as the private clients or corporate clients divisions, in the management board division. This separation applies in particular to control functions such as risk management, but also to compliance.
Only the two regional heads of the institute, Christiana Riley, formerly head of the US region, and Alexander von zur Mühlen, head of the Asia region, have mixed duties: They are responsible for operations and cross-departmental tasks in their region, but they don’t sit in the front row. Instead, they always have to coordinate with the key responsible board members, such as Fabrizio Campelli, head of corporate and investment banking, or Stefan Simon, who is in charge of regulatory issues.
Building better relationships with U.S. regulators is a top priority for Deutsche Bank.
(Photo: dpa)
The bank has softened that apparent separation with a reshuffle of its board in April: Simon’s main role has been to improve the bank’s difficult relationship with U.S. regulators and ensure a “first-class risk and control culture” in the United States. As announced by the bank. It should also “support the further expansion of its business and relationships with customers and investors in the region,” according to an April 26 announcement.
Simon is thus the first member of Deutsche Bank’s board, at least in the near term, to take on more responsibility in the business area in addition to his controlling role on the board. Chief Financial Officer James von Moltke will also assume operational responsibility in the future, as he has assumed board responsibilities for the fund’s subsidiary DWS. However, he is not yet a member of the company’s supervisory board and, unlike Stefan Simon, as CFO he does not exercise any control functions, such as compliance or risk management.
more: Deutsche Bank reshuffles board – U.S. boss Riley to move to Santander