Deutsche Bank plans new tech division; bitcoin futures platform fizzles

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Deutsche Bank, which has long been plagued by “lousy systems” and “very slow processes,” in the words of former CEO John Cryan, is creating “a new technology division in a strategy shift designed to reduce complexity and lower costs while transforming systems that have held back the bank for years. The German lender’s legacy IT systems have been blamed in part for the bank’s failure to control costs and for its slow progress in keeping up with the wave of fintech innovation across the industry.” The bank “has vowed to invest 13 billion euros ($14.2 billion) in technology by 2022.”

Manfred Knof, Deutsche Bank’s new retail chief, “faces the twin challenge of rejuvenating revenue at the bank’s domestic retail operations while also extracting €1.4 billion in annual cost savings from the business. Whether Mr. Knof succeeds will go a long way in determining the fortunes of Germany’s largest bank, which is undergoing its most radical overhaul in more than a generation as chief executive Christian Sewing abandons the lender’s ambitions to be a force on Wall Street.”

Wall Street Journal

Big letdown

Bakkt, the bitcoin-futures platform created by Intercontinental Exchange in a “high-profile bet that Wall Street and institutional investors would embrace cryptocurrencies,” has been a dud so far. “Trading of Bakkt’s bitcoin futures contracts has been minuscule. Only 49 contracts were traded on Friday,” and in the previous nine sessions, only 865 contracts changed hands.

“Those figures were a letdown after months of anticipation. Bitcoin’s price has fallen about 19% since Bakkt’s launch, trading Monday morning around $8,167.”

Financial Times

Gold bugs

Barclays will launch Tuesday what the FT calls “the world’s first zero-fee precious metals exchange traded products. The aggressive move by Barclays will push competitors, including BlackRock and State Street, to respond with fee cuts at a time when demand for gold from investors is nearing an all-time high.” The U.K.-based bank aims to “make a profit by investing allocations from investors into strategies that deliver higher returns than gold and silver, which do not provide an income stream, unlike stocks and bonds.”

Warning signal

HSBC’s decision to cut 10,000 jobs while it’s in “a position of strength” indicates that it could “be seen in the vanguard of adapting to a changed macro situation” that includes “slowing global growth and the mounting pressure on lending margins from looser monetary policy. As in 2007, other banks would do well to heed the early warning signal.”

Looking back

A decade after the financial crisis, which “presented central banks with unprecedented challenges, and their response was to take extraordinary actions, … we can say that these measures succeeded in saving the global economy from deflation, but also introduced some distortions in a few areas of the capital markets,” write Philip Lowe, governor of the Reserve Bank of Australia and chair of the Committee on the Global Financial System at the Bank for International Settlements, and Jacqueline Loh, chair of the BIS Markets Committee. “Central banks need to strike the right balance between providing guidance that reduces uncertainty and unduly narrowing down central bankers’ options to respond to changing circumstances in the future.”


“From my perspective as Fed chair, he is responsible more than any other person for the fact that the United States today has an independent central bank—a central bank able to make decisions in the long-term best interest of the economy, without regard to the political pressures of the moment.” — Federal Reserve Chair Jerome Powell, talking about the late Marriner S. Eccles, the Fed’s chairman from 1934 to 1948.

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