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Deutsche Bank took as much as €10bn of European Central Bank emergency funding last week, despite deep reservations over the programme voiced by outgoing chief executive Josef Ackermann.
Investors briefed by Deutsche Bank’s finance director and investor relations executives say the bank was persuaded by the economics of the financing to abandon its concerns.
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In early February, Mr Ackermann made clear that he was loath to tap the longer-term refinancing operation (LTRO) – ultimately taken up by 800 banks for an aggregate €530bn – for fear of being stigmatised as a weak institution.
“The fact that we have never taken any money from the government has made us, from a reputational point of view, so attractive to so many clients in the world that we would be very reluctant to give that up,” he said at the time.
Mario Draghi, the ECB president, who staked his reputation on countering dangerously bearish sentiment on the eurozone with the LTRO programme, was clearly riled by the comments. A few days later, in thinly veiled criticism, Mr Draghi bemoaned the “statements of virility” from certain bankers.
As has often been the case in these matters, Mr Ackermann’s comments echoed the views of the German authorities. Last week, a letter from Bundesbank president Jens Weidmann to Mr Draghi was leaked, revealing the German’s scepticism about the terms of the LTRO.
The programme, first launched in December, has seen Europe’s banks raise more than €1tn of funding at an interest rate of just 1 per cent.
Mr Draghi has been widely hailed by the banking industry and eurozone officials for cutting government bond yields and thawing frozen commercial funding markets, although there have been concerns about longer-term market distortions the LTRO could cause.
Deutsche Bank declined to comment on the issue on Thursday. But three people familiar with the issue said the bank had taken at least €5bn-€10bn of LTRO money in the February auction.
Mr Draghi said on Thursday that 460 of the 800 banks that took part were German.
Like other banks with significant operations in the eurozone periphery, Deutsche tapped a large portion of the funds via its subsidiaries in Spain and Italy.
Analysts suggested there may have been tension on the issue between Mr Ackermann and the incoming co-chief executives – Anshu Jain, current investment banking chief, and Jürgen Fitschen, now Germany head. However, the board is understood to have supported the approach unilaterally.
It emerged on Wednesday that Deutsche was rejigging senior management. Four senior investment bankers have been promoted to new roles: Colin Fan and Rob Rankin are to be co-heads of the investment bank; Michele Faissola will head a new asset and wealth management unit; and Stephan Leithner will lead European operations outside Germany.