Already struggling with a bad reputation for past banking practices, Deutsche Bank has suffered another blow in the effort to polish its image. Top brass at Germany's largest bank are under investigation for tax evasion.
Authorities in Frankfurt are investigating whether leading members of Deutsche Bank co-Chief Executive Officer Jürgen Fitschen and Chief Financial Officer Stefan Krause were privy to a scheme to avoid paying sales tax in the trading of carbon emissions certificates.
At a time when banks across Europe are struggling to cope with the ongoing debt drama, Deutsche Bank has aimed to show that a change in top management is the key to ushering in a new era of accountability and heightened ethical standards. In June, Fitschen and investment banker Anshu Jain took over as co-CEOs for long-time head Deutsche Bank head Josef Ackermann.
"Deutsche Bank managed the financial crisis quite well during very difficult time in the financial market system, but they had been some problems in their moral or ethical behavior," said Dominik Enste, an expert on business ethics at the Cologne Institute for Economic Research.
Enste, who met with Fitschen last year, said he found the bank's new co-chairman open to examining the bank's corporate culture, adding that he saw the bank as committed to the change Fitschen and Jain promised.
"Fitschen proposed a new strategy that puts the customer into the main focus of the company again instead of investors and profits," Enste told DW. "They are really trying to make a change, but it takes some time to change the culture of a company."
German Green party parliamentary group head Jürgen Trittin, however, was less willing to give the bank time to change.
"The time has finally come for Deutsche Bank to get looked into," he told Reuters. "Every time there is a financial scandal Deutsche Bank is involved."
Tough times for Deutsche Bank
Allegations related to this week's raids in Germany date back to 2009 when traders were accused of devising a scheme to evade paying roughly 300 million euros ($390 million) in value-added tax (VAT) on carbon permits between August 2009 and April 2010.
Fitschen and Krause are under the microscope because they signed VAT statements for 2009. At the time, Fitschen was the bank's Germany head, and Krause was then, as now, chief financial officer. Deutsche Bank said it corrected its 2009 tax statement; the bank and authorities, however, disagreed on whether the statement had been amended in a timely fashion.
Deutsche Bank, as well as other institutions, is under investigation by US and European Union authorities for possible manipulation of interest rate banks when loaning money to each other. The lender also paid a $202 million fine after the US Justice Department claimed the bank's subsidiary provided false information to qualify for mortgage insurance.
Change - easier said than done
Deutsche Bank on Wednesday said in a statement that it was fully cooperating with the authorities, and that's exactly the type of response that might even speed up the pace of change at the bank, said Enste.
"They can make sure that the organization and the structure has changed and that the individuals responsible are held responsible," he said, adding that while Fitschen and Krause signed the tax statement, real responsibility for crimes lies much deeper in the corporation - with the people responsible for the carbon certificate trades.
But the series of scandals are evidence that Deutsche Bank is not committed to the change it promised, according to Dieter Hein, a banking sector analyst at Fair Research.
"It is evident that there has been no change of culture," he told DW. "If you look at the compensation philosophy, Deutsche Bank has done exactly the opposite of its claimed compensation policy."
The number of charges and investigations leveled against the banking sector show that banks only pay lip service to promoting moral changes and deeds do not follow their words, Hein added.
He said Germany's largest lender would have to make a major break with the past if it truly wants to improve its reputation among the public.
"If they want to avoid such investigations in the future they need a clear personnel cut. They should promote a non-investment banker as CEO," Hein said. "Currently, they are doing the opposite, so this does not seem like the direction the bank wants to go."
The Mexican Soccer Federation has sacked national team coach Miguel Herrera after allegations he assaulted a journalist. Herrera, nicknamed "El Piojo" was famous for his energetic sideline persona.
Security crackdowns in the port of Calais have prompted more migrants to attempt the crossing underground through the Eurotunnel. The massive waves of migrants trying to get through has worried the British government.
Global investment funds are turning increasingly skeptical about Russia's economic prospects, as investors show less interest in Russian equities. The "BRIC" investment idea is also no longer attractive.