Naughtiness must not be tolerated at Deutsche Bank, redux

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Deutsche Bank is in the throes of a behavioural revolution. It's busily hiring people to implement a 'cultural initiative project' and propagate its 'values and beliefs.'  It's launched a 'living the values award' and assembled a 'global culture ambassador network.'

Is the cultural paradigm shifting? Maybe not. Deutsche's values and beliefs have been knocking around since 2013 so it could be time step up the pressure? One of its senior analysts seems to think so.

In an article in Deutsche's fashionable new thought leadership magazine 'Konzept,' Robert Clifford, Deutsche's European metals and mining analyst, advocates zero tolerance of employee misdemeanors. Clifford says his previous experience in the mining industry suggests banks are going about compliance all wrong: it's not about hiring hundreds (or tens of thousands) of compliance staff to enforce circumspection, it's about persuading individual employees to take responsibility for their actions.

This means changing employees' behaviour. And one way to do that is to mete out harsh and swift punishment for malfeasance. "The smallest breaches of its golden rules meant employees were not hired at the end of their probation periods, or that existing employees were quickly fired," says Clifford of DuPont, a mining company whose safety record was impeccable back in the day.

Deutsche wants to be harsh in theory. Colin Fan, head of Deutsche's investment bank, warned of 'severe consequences' for any bankers showing 'vulgar behaviour' back in May 2014.  However, the bank dragged its feet on dismissing its LIBOR traders, only firing them in April 2015 under orders from the regulator despite a trail of transgressions between 2005 and 2010.

Time for Deutsche Bank to put its boot behind its beliefs? One of its own staff has made a good case for doing so.

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