The largest bank of continental Europe, Deutsche Bank AG DBK, would now undertake changes in its balance sheet in order to comply with the stricter rules to be implemented. This was confirmed by the bank's CFO Stefan Krause.
Krause said in an interview with Boersen-Zeitung that was published today, Deutsche Bank was 'well-prepared' to comply with the European Union leverage target while under higher capital requirements. He added, "We have to further reduce our balance sheet and set aside profit."
Many European regulators are looking at leverage as well as risk weightings that are assigned to different assets in order properly assess the financial strength of the bank. The rules are in different stages in the Eurozone countries, stand to hurt investors as the banks would either have to lower their asset base or increase their capital base in order to meet the regulatory requirements.
Krause also said that the leverage ratio would serve, aside from the capital requisities that are based on projected risk, to focuse the bank to manage the risk and reduce further lending.
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