May 04, 2015
FRANKFURT — Deutsche Bank has taken a series of radical restructuring measures that have everything to do with events from seven years ago, when the collapse of New York-based bank Lehman Brothers ignited the global financial crisis.
Deutsche Bank survived the crisis more or less intact. But the relative success it enjoyed under CEO Josef Ackermann between 2002 and 2012 may have blinded the German bank to the ways financial markets changed after the 2008 crash. This seems to be the only plausible explanation for problems that have beset the Frankfurt bank since then.
Current co-CEOs Anshu Jain and Juergen Fitschen are now having to play catch up, to adopt lessons that should have been learned years ago. As such, they decided to sell the Postbank subsidiary and minimize the remainder of the banking institute. The absolutely atrocious stock price leaves them with no other choice.
Two things changed because of the financial crisis. Pestered by an angry populace, politicians and financial regulators made it clear that they were serious about controlling the banking sector's movements. They signaled an unwillingness to spend billions in taxpayer revenue to save the world's financial system a second time around.
For that reason, banks are now required to hold more in equity funds to secure their businesses. This is costing the banks a substantial amount of their profits. Furthermore, the new equity fund laws have been justifiably constructed in such a way that larger, international banking institutions are required to have larger equity funds than smaller banks.
Minimizing can therefore be beneficial. Which is why Deutsche Bank is not only selling its Postbank subsidiary but is also reducing the scope of its investment banking. This will ensure security, but it also means job losses.
No more tolerance
The attitude of the financial regulators has also changed, especially in countries with longstanding capital market traditions, such as the United States and Britain. These countries operate zero-tolerance policies when it comes to violation of laws and executive orders and tend to impose serious punishments.
For a long time bankers appeared not to take these regulatory bodies seriously, which helps to illustrate how significant Deutsche Bank's cultural reform really is. Adhering to the old financial culture resulted in a fine of 2.3 billion euros for manipulating interest rates during the London Libor scandal. The bank seems finally to be learning its lesson.
In Frankfurt, Deutsche Bank should also give high priority to the difficulties it's facing with the U.S. financial controller. The Federal Reserve has been negotiating with Deutsche Bank’s North American subsidiary because it finds its financial reports "of low quality and not reliable." Deutsche Bank even failed the second stress test due to a deficiency in reporting techniques. All of these problems could lead to an explosive mixture that might backfire on an institution that wants to remain at the international forefront of investment banking.
The second factor that has changed since the financial crisis are interest rates. The Federal Reserve and European Central Bank are flooding the markets with cheap money to stabilize the economy and prevent deflation. Those who want to save their money barely receive any interest and are sometimes even forced to pay.
With that in mind, Deutsche Bank apparently didn't see a future for its Postbank, whose main clientele are small-time savers and borrowers. So the Postbank subsidiary will be phased out after only seven years of being part of Deutsche Bank. Without this subsidiary, Deutsche Bank hopes it can adhere to the equity requirements regulators have imposed.
After its restructuring phase, Deutsche Bank will look exactly as it did before the financial crisis, only smaller, relatively speaking. It will be an investment bank that will also have a retail banking department for high-end clients. It's betting on its ability to outperform the competition in certain areas. The success of this strategy will depend on whether the financial culture change in investment banking that Jain and Fitschen talk so much about is truly happening.
Meanwhile, the German banking sector as a whole still has some major issues to resolve. There may be a healthy number of Volksbanken and Sparkassen on a local level, but the larger banks still face difficulties. Because of the post-crash bailout, Commerzbank, for example, is still partially state-owned. The regional banks may be in even deeper trouble. And with the employees of the only German bank of international standing fighting among themselves, there's really nowhere else to turn.
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food / travel
With Halloween arriving, we have dug up the would-be ghosts of documented evil and bloodshed from the past.
Laure Gautherin and Carl-Johan Karlsson
October 26, 2021
When Hallows Eve was first introduced as a Celtic festival some 2,000 years ago, bonfires and costumes were seen as a legitimate way to ward off ghosts and evil spirits. Today of course, with science and logic being real ghostbusters, spine-chilling tales of haunted forests, abandoned asylums and deserted graveyards have rather become a way to add some mystery and suspense to our lives.
And yet there are still spooky places around the world that have something more than legend attached to them. From Spain to Uzbekistan and Australia, these locations prove that haunting lore is sometimes rooted in very real, and often terrible events.
Shahr-e Gholghola, City of Screams - Afghanistan
The ruins of Shahr-e Gholghola, the City of Screams, in Afghanistan
According to locals, ghosts from this ancient royal citadel located in the Valley of Bamyan, 150 miles northwest of Kabul, have been screaming for 800 years. You can hear them from miles away, at twilight, when they relive their massacre.
In the spring 1221, the fortress built by Buddhist Ghorids in the 6th century became the theater of the final battle between Jalal ad-Din Mingburnu, last ruler of the Khwarezmian Empire, and the Mongol Horde led by Genghis Khan. It is said that Khan's beloved grandson, Mutakhan, had been killed on his mission to sack Bamyan. To avenge him, the Mongol leader went himself and ordered to kill every living creature in the city, children included.
The ruins today bear the name of Shahr-e Gholghola, meaning City of Screams or City of Sorrows. The archeological site, rich in Afghan history, is open to the public and though its remaining walls stay quiet during the day, locals say that the night brings the echoes of fear and agony. Others claim the place comes back to life eight centuries ago, and one can hear the bustle of the city and people calling each other.
Gettysburg, Civil War battlefield - U.S.
View of the battlefields from Little Round Top, Gettysburg, PA, USA
Even ghosts non-believers agree there is something eerie about Gettysbury. The city in the state of Pennsylvania is now one of the most popular destinations in the U.S. for spirits and paranormal activities sight-seeing; and many visitors report they witness exactly what they came for: sounds of drums and gunshots, spooky encounters and camera malfunctions in one specific spot… just to name a few!
The Battle of Gettysburg, for which President Abraham Lincoln wrote his best known public address, is considered a turning point in the Civil War that led to the Union's victory. It lasted three days, from July 1st to July 3rd, 1863, but it accounts for the worst casualties of the entire conflict, with 23,000 on the Union side (3,100 men killed) and 28,000 for the Confederates (including 3,900 deaths). Thousands of soldiers were buried on the battlefield in mass graves - without proper rites, legend says - before being relocated to the National Military Park Cemetery for the Unionists.
Since then, legend has it, their restless souls wander, unaware the war has ended. You can find them everywhere, on the battlefield or in the town's preserved Inns and hotels turned into field hospitals back then.
Belchite, Civil War massacre - Spain
Old Belchite, Spain
Shy lost souls wandering and briefly appearing in front of visitors, unexplainable forces attracting some to specific places of the town, recorded noises of planes, gunshots and bombs, like forever echoes of a drama which left an open wound in Spanish history…
That wound, still unhealed, is the Spanish Civil War; and at its height in 1937, Belchite village, located in the Zaragoza Province in the northeast of Spain, represented a strategic objective of the Republican forces to take over the nearby capital city of Zaragoza.
Instead of being a simple step in their operation, it became the field of an intense battle opposing the loyalist army and that of General Francisco Franco's. Between August 24 and September 6, more than 5,000 people were killed, including half of Belchite's population. The town was left in rubble. As a way to illustrate the Republicans' violence, Franco decided to leave the old town in ruins and build a new Belchite nearby. All the survivors were relocated there, but they had to wait 15 years for it to be complete.
If nothing particular happens in new Belchite, home to around 1,500 residents, the remains of old Belchite offer their share of chilling ghost stories. Some visitors say they felt a presence, someone watching them, sudden change of temperatures and strange sounds. The ruins of the old village have been used as a film set for Terry Gilliam's The Adventures of Baron Munchausen - with the crew reporting the apparition of two women dressed in period costumes - and Guillermo del Toro's Pan's Labyrinth. And in October 1986, members of the television program "Cuarta Dimensión" (the 4th dimension) spent a night in Belchite and came back with some spooky recordings of war sounds.
Gur Emir, a conquerer’s mausoleum - Uzbekistan
Gur Emir (Tomb of Timur) in Samarkand, Uzbekistan
The news echoed through the streets and bazaars of Samarkand: "The Russian expedition will open the tomb of Tamerlane the Great. It will be our curse!" It was June 1941, and a small team of Soviet researchers began excavations in the Gur-Emir mausoleum in southeastern Uzbekistan.
The aim was to prove that the remains in the tomb did in fact belong to Tamerlane — the infamous 14th-century conqueror and first ruler of the Timurid dynasty who some historians say massacred 1% of the world's population in 1360.
Still, on June 20, despite protests from local residents and Muslim clergy, Tamerlame's tomb was cracked open — marked with the inscription: "When I Rise From the Dead, The World Shall Tremble."
Only two days later, Nazi Germany invaded the Soviet Union, with the people of Samarkand linking it to the disturbing of Tamerlane's peace. Amid local protests, the excavation was immediately wrapped up and the remains of the Turkish/Mongol conqueror were sent to Moscow. The turning point in the war came with the victory in the Battle of Stalingrad — only a month after a superstitious Stalin ordered the return of Tamerlane's remains to Samarkand where the former emperor was re-buried with full honors.
Gamla Stan, a royal massacre - Sweden
The red house of Gamla Stan, Stockholm, Sweden
After Danish King Kristian II successfully invaded Sweden and was anointed King in November 1520, the new ruler called Swedish leaders to join for festivities at the royal palace in Stockholm. At dusk, after three days of wine, beer and spectacles, Danish soldiers carrying lanterns and torches entered the great hall and imprisoned the gathered nobles who were considered potential opponents of the Danish king. In the days that followed, 92 people were swiftly sentenced to death, and either hanged or beheaded on Stortorget, the main square in Gamla Stan (Old Town).
Until this day, the Stockholm Bloodbath is considered one of the most brutal events in Scandinavian history, and some people have reported visions of blood flowing across the cobblestoned square in early November. A little over a century later, a red house on the square was rebuilt as a monument for the executed — fitted with 92 white stones for each slain man. Legend has it that should one of the stones be removed, the ghost of the represented will rise from the dead and haunt the streets of Stockholm for all eternity.
Port Arthur, gruesome prison - Australia
Port Arthur Prison Settlement, Tasmania, Australia
During its 47-year history as a penal settlement, Port Arthur in southern Tasmania earned a reputation as one of the most notorious prisons in the British Empire. The institution — known for a brutal slavery system and punishment of the most hardened criminals sent from the motherland— claimed the lives of more than 1,000 inmates until its closure in 1877.
Since then, documented stories have spanned the paranormal gamut: poltergeist prisoners terrorizing visitors, weeping children roaming the port and tourists running into a weeping 'lady in blue' (apparently the spirit of a woman who died in childbirth). The museum even has an 'incidence form' ready for anyone wanting to report an otherworldly event.
Poveglia Island, plague victims - Italy
Poveglia Island, Italy
Located off the coast of Venice and Lido, Poveglia sadly reunites all the classical elements of a horror movie: plagues, mass burial ground and mental institute (from the 1920's).
During the bubonic plague and other subsequent pandemics, the island served as a quarantine station for the sick and anyone showing any signs of what could be Black Death contamination. Some 160,000 victims are thought to have died there and the seven acres of land became a mass burial ground so full that it is said that human ash makes up more than 50% of Poveglia's soil.
In 1922 a retirement home for the elderly — used as a clandestine mental institution— opened on the island and with it a fair amount of rumors involving torture of patients. The hospital and consequently the whole island was closed in 1968, leaving all the dead trapped off-land.
Poveglia's terrifying past earned it the nickname of 'Island of Ghosts'. Despite being strictly off-limits to visitors, the site has been attracting paranormal activity hunters looking for the apparition of lost and angry souls. The island would be so evil that some locals say that when an evil person dies, he wakes up in Poveglia, another kind of hell.
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