The Deutsche Bank, a German banking and financial services institution, is facing a widening tax evasion investigation. Early this month, the Financial Times cited claims from former employees that the bank had failed to publish losses amounting to $12bn sustained during the financial crisis. Since then, pressure from both the police and media has been building steadily.
On December 12 five hundred police and tax inspectors raided the bank’s headquarters in Frankfurt. In all 25 staff are under investigation on suspicion of widespread tax evasion, money laundering and obstruction of justice. Among them we find members of the bank’s management board, including the bank’s co-CEO Jürgen Fitschen and its Chief Financial Officer Stefan Krause.
In the opinion of most commentators here in Germany, there is little doubt now that legal action will follow, and that 2013 will be a difficult year for those managers wishing to retain their positions. The weekly newspaper Die Zeit reports that the management board is actively seeking to restore confidence in its operations, with Mr Fitschen making frequent public appearances and Anshu Jain, the bank’s other co-CEO, addressing the Deutsche Bank’s customers and employees in private. Meanwhile, the centre-left Süddeutsche Zeitung has also addressed the recent publication by financial regulators of hundreds of pages of email exchanges between employees of the Swiss bank UBS: these again shed light on manipulations of the Libor borrowing rate, a benchmark used worldwide for loans worth trillions daily.
The simultaneous revelation of wrongdoing in UBS and alleged wrongdoing at the Deutsche Bank will do little to quell calls among the German general public for tighter regulation of financial regulations in the wake of the economic crisis.