even if they're on temporary difficult his to develop positively mean why was she so nervous don't you bank is at the heart of the financial system closely networked vajra vast number of deals what would happen if it went bankrupt we asked banking expert professor hunt's pay to book off. they dodge a bank is essential to germany we have to save it that could cost the taxpayer money that means europe would have less money in a really bitter situation that could mean that the german and the european taxpayer would in directly pay the fine to the americans. left alone can you take me to the edge of out that sixty votes. thank you things became hectic in winter twenty sixteen khalfan war was to negotiate the fourteen billion dollars down to an acceptable level the clock was ticking the matter was supposed to be off the table by the end of the year. as it's

now you're sitting in a room in the department of justice in brooklyn in a normal meeting room on its own. and both sides present the matter from their point of view of the dinner went to not opinions differ and so you make offers and counteroffers over the course of days and weeks argument our situation on the board ongoing and the board hours. negotiations cost money and trust the longer they take the more of buffer lost. to the start and of course we knew we'd have clients who would react to that with extreme irritation and we've done a lot to prepare ourselves as well and when you have such turbulence you always risk losing client money all the clients will say that if they have business in mind they'll put it off and come back later when everything's over and often in the life or income don't be dumb enough for bias. coming down clients colleagues and

shareholders imparting confidence around the world twenty four seven nothing was more important losing trust means losing money twenty thirty million month after month the bank had to put a stop to that but how. come on in a bank can you trust a bank that's been landed with such a big fine the whole institution could be at risk even if there's not much of substance behind it banks live on trust of. the banks reputation was badly hit the only solution was to look ahead to the new management decided on a policy of openness bank spokes person i gained off invited us to participate in a conference for senior managers. if we behave in a mall way and all of you know that you can fix the. time if.

you can't do something what you know you can try to be something where you have to live what you want to be but what do they want to be open and credible that's why we're allowed to film but the spokes person also reveals a fear of too much openness you'll see exactly what we want to show you the bank's own self-confidence has taken a knock and see if we are going to act up was when you told people in the past you worked at deutsche bank there was no further comment as it was a first class address from a reputational standpoint that was one of the reasons why i chose my job because it stood for solid training that uncle if you had the chance or the good fortune to train at dodge a bank like it was a great way to get your career going about us in poland she can export food yet the fifth of december twenty sixth seen speculation about the fate of dacha bank had now been ongoing for almost three months the united states was still demanding fourteen billion dollars the international business press was invited to the dutch a bank's guest villar the address of past glories for

a confidential background briefing. even if the journalists trusted dacha bank a little bit more after this evening it would be a big step forward. it was a tense period and i personally wanted to take some only. ship of the situation was a very important situation for the bank and we wanted to clarify the matter as soon as possible but of course in those negotiations you never control the timetable and it took a little longer than we would have liked it lasted much longer than expected and the discussions were wide ranging what would happen with the fourteen billion pound the bank intend to make money again in the future without profits the bank would still be a risk and dangerous to the whole banking system c.e.o. john cryan in the middle flanked by the co-heads of investment and private banking they are the crown prince is one of them will probably replace crying at the head of the table after the cleanup operation is finished if everything goes well.

private banking boss christian saving tells matty as book one of the seven german regional buses to talk to his clients personally and calm them down tell the people out there that will make it will get through this fourteen billion just as we've survived all the other crises in a hundred and forty seven year history. scott target and there were days and even weeks when i had twenty meetings a days because the clients wanted to find out for themselves what was going on at the bank. president you have to tell clients that the bank remains strong and stable at the same time you have employees who are worried you lots of hugs from the news or mom but it wasn't just clients who were involved hundreds of branches were two hundred and eighty eight were closed down five hundred were left tens of

thousands of employees were worried about their jobs. dodging bank actually has a different background it is traditionally sent to the german business world. think germany is a perfect example of a country that did extremely well over a long period of time with it play a very let's say conservative approach to finance focused on the customer focused on the corporate sector and so on. you never bill you did not build the modern german economy on the basis of speculative financial activity. some other countries such as the united states had more of a tradition let's say in that kind of speculation you did you did not praise from a former i.m.f. economist no less but for a long time don't you bank was embarrassed about its german business. regional boss monti as book is on his way to meet a client they give their packaging company in bad noise in western germany.

with the yogurt pot king is a shining example of germany's small and medium sized businesses or s emmy's it has factories across europe and most recently in canada. the boss is certain with its course plastic packaging america needs german yogurt pot technology. i think we have some clients but i would like to have people in north america who i can talk to about a new customer base and even new contacts. that's an easy call for the international deutsche bank or from them i can talk metals i'll get in touch with our colleagues in new york we have research analysts for the food industry and i can put you in touch with properties of mine can talk to your stone from bag to wall street and international network.

william schmitz works for dontcha bank and he's happy to be of assistance. oh yeah absolutely you know what i'll do is like that when i get back to my desk. some data on some of the trends in the us and other food and beverage side you look at some of the trends in the u.s. food retail environment. the german yogurt part goes to america that too is one investment banking is about. this meant that as a company businesses and states as they conduct their deals or if they want to sell shares all bonds they advise companies when they float on the stock markets and during merges and they juggle stocks foreign currencies and financial products of all kinds investment bankers are the ones who make that really big money for their

institutions. such as banks investment bank has dreamed big and went to the hyundai and of capitalism the united states brought back some really big risks that deals scared the i.m.f. and caused the american justice department to spring into action they decided in one thousand nine hundred more or less that they wanted to radically transform themselves and shift from being what i would describe as a somewhat stodgy conservative european commercial bank that basically lend to heavy industry to a new high powered high respect that would engage in investment banking to routers trading and do securitizations all of that required a talent and i think ability that they did not help. you get in the us here so often that when you see i remember we went to a university campus to attract students to work for deutsche bank but if you showed

up here the nikkei the column. so they bought in the case of deutsche bank they bought. bankers trust to get into the investment banking business in this country. in our bank after bankers trust hundreds came because we were suddenly part of america america's. best investment banking in. investment banking in the united states has changed from being about underwriting and giving advice to being about from a tree trading one him issue and speculating school shift to another has meant taking on an increasing amount of risk shift but i'm game for him i'm a he's a. proprietary trading

means trading on one's own account and it fueled a gambling instinct banks lend to each other money on particularly favorable terms it became possible to trade in stocks currencies gold and derivatives to an extent that had never been seen before or for the profits of the banks and the bankers who took home huge commissions bought proprietary trading can go wrong to. all that mattered back then was taking part in the game the bills came in years later they cost billions in cash and the equivalent in trust. and should jane was one of the first to get involved and was right at the heart of it he was rewarded by being made c.e.o. of deutsche bank. and shoes army had conquered dortch a bank from london the future it seemed to belong to it under its leadership the bank made huge profits for years the higher the risk the higher the potential

return quick money for tough guys who like to gamble. the. dumb firms view themselves as sort of swashbuckling wild west cowboys. who are going to take crazy risks and because they know that they'll make money. torture bank paid something like sixty five billion euros in incentive bonuses to their staff over the period from one thousand nine hundred ninety five that's an extraordinary amount of money and you've got people getting as much as one hundred million or more in bonuses in a given year and they were incentivized to take extraordinary risk and that

produces a problem because you take extraordinary risk and sooner or later something goes wrong and went wrong in a big way for ga. they couldn't quite control what they set in motion. by may twenty fifteen couldn't keep going shortly after the a.g.m. it was over for him. distinct i think from a trick trading led to excessive risks in the banks and we really don't have to repeat not something like that what to happen again i don't know what the banking sector would look like afterwards if there was even the one left it's i could imagine banks being nationalized but i don't think that would bring about tenants protesting for. the bank promised to clean up its act in derivatives trading a risky business closely connected to the crisis. when you buy derivatives you're gambling on future outcomes if you think that

a currency or a commodity signs of will be worth more in a few months you buy a derivative for this product if you sell the derivative as soon as it's worth more you're in luck. when you've made money. in times of economic growth when the innovation is happening other kinds of people are attracted to banking and they may be they may be a risk lover as. people want some excitement in their lives. and they sure got it derivatives in the united states triggered the global banking crisis and ultimately threatened deutsche bank with the billion dollar fine so what actually happened. don't you bank and others had packaged and sold mortgages in deliver to us without telling investors that those mortgages were as they say sub prime in other words there was

a high risk of default. that acquired mortgages many of which were faulty they obviously knew that a lot of them were faulty they continued to pack of them up into mortgage backed securities and sell them off around the world as investment and that wasn't all employees it don't your bank even gambled on their own shares falling in other words on their own clients losing money this sort of excessive risk taking is now frowned upon at least if we're to believe the many compliance officers risk managers and regulators in the bank they're under the supervision of this woman who used to work as director of financial stability at bank to force banking in may we go back to a kind of boring activity and and that's fine i would job as i mentioned all your ease to to manage risk far other people follow up red for putting forward then people we need we we are there to manage their risk which means that it might be

not always very fancy but that something that in fact gives you a value added for the global economy as a whole and so that's something that may be looked as boring but i think it's something that is useful for the economy and that should be rewarded shortly before christmas twenty sixteen the size of the find a bank would really have to pay for selling mortgage backed securities became clear don't you bank was able to talk the justice department down from fourteen to seven point two billion dollars. so you say to me is this a good deal for doj a bank is an incredible deal for dogs or bag for. take seven billion of their shareholders money they give it to the justice department who extorts them and basically rules on whether or not they can do business in this country and the whole thing goes away. the american state would only get three point one billion dollars directly the remaining four point one billion will be offered to clients who'd lost money the bank was obliged to cancel the debts of homeowners who

defaulted and support communities harmed by the crisis. but. the biggest case was almost off the table but it was just one of eight thousand those who work in the department of justice won't have to worry about their jobs just yet don't you bank is like a major law firm with a banking license. is gifted is a there's this unfortunate number of eight thousand legal cases it's not always a bit misleading because if you look more closely the cases that are really significant or relevant are no more than twenty the significance and eleven. these twenty account for ninety percent of our provisions for legal disputes and

they don't for a child of god that means the seven thousand and some other cases result from on day to day business and aren't in any way on the usual. shift what does is going to win given. that may or may not be so we'd like to check that and compare the stats with those of other banks but other banks don't publish the number of their lawsuits dacha bank publishes its fines. over the past five years it has had to pay out fifteen billion euros. and very disappointing when colleagues have behaved in that manner. and what we need to do is obviously learn from those mistakes and ensure that to the maximum extent possible we don't allow them to recover. that's why internal controls have been improved. here at the brand new risk center in berlin six

hundred fifty scientists and traders calculate everything that could go wrong from acts of god. to bad speculations. we are typing our into local horse specially in the field of compliance i mean is trying to make sure that you comply with what you should comply with which is not any and regulation which is a ballerina but also what the company would like to comply with and also what society at large would expect banks to comply with. that all sounds good but what does it look like in practice there have been more new cases under the new management russian klein.