Deutsche Bank faces its future

Deutsche Bank has promised its shareholders a new era, one that will likely be less profitable but perhaps more ethical, though I hope the two are not mutually exclusive.

''Tremendous mistakes have been made,'' said Anshu Jain, co-CEO along with Jürgen Fitschen, who joined him at a watershed press conference, adding that "We can see times have changed and we need to change and change rapidly.''

Jain and Fitschen "avoided criticizing their predecessor, Josef Ackermann, who ran the bank for a decade before his retirement in May. But much of their presentation amounted to a repudiation of Mr. Ackermann's legacy. They presented an unusually frank assessment of Deutsche Bank's shortcomings and promised to redress them. The flaws include relatively weak capital reserves, excessive dependence on investment banking and a tarnished reputation. They also backed away from the profit standard that Mr. Ackermann had long advocated: a 25 percent return before taxes. Deutsche Bank will now aim for an aftertax return of 12 percent on equity, a standard measure of bank performance," according to DealBook.

Jain also said that the Libor scandal participation by the bank was the handiwork of a small group of employees. All in all, this is the sort of come-to-the-Lord moment that we never quite saw from U.S. banks, which as a group were much more defiant.  

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