It's really sad to see how a once solid bank like Deutsche Bank was run into the ground by CEOs who wanted to make their bank "modern" and squeeze out ever more profit. Reminds me of Daimler-Benz when management decided they need to grow and merge with Chrysler. What a disaster. I hope German company bosses will learn that solid but boring is a good thing.
What seems to be always forgotten is that those over-aggressive CEO's are elected to satisfy the demand of the shareholders, and the bulk of those want only one single thing: more profit on their shares.
And for the share price to grow, being just a solid bank is not enough.
This doesn't apply only to banks, it happens also at other exchange listed companies. But banks are the most tragic example of course, because if those aggressive policies fail, the government has to step in.
Anyway, the bottom line is: it's not like all troubles in the financial world are all the fault of some evil CEO's. The whole system is at fault, including the shareholders themselves.
In the case of Daimler-Chrysler there was no shareholder pressure. They would have been happy with getting a nice dividend every year. It was pure ego trip by the CEO (Schrempp) who wanted to play with the other big boys like GE. They created a huge and expensive corporate headquarter far away from any car-related activity to pretty much signal that management is above the guys who produce cars.
Same for Deutsche Bank when they declared a 25% return on equity goal. Many people said there is no way they can achieve this but the CEO kept pushing so they had to rely on shady business practices and increase risk. It's a pure ego trip. Nothing else.
