After Deutsche Bank's announcement that it would follow through on plans to launch a "bad bank" stuffed with toxic assets and long-dated derivatives failed to revive the company's flagging shares, which tumble to fresh all-time lows seemingly every day now, embattled CEO Christian Sewing is reportedly preparing to make a ritual sacrifice to the finance gods.
James von Moltke
According to media reports on Tuesday, Sewing is weighing whether to replace CFO James von Moltke and bring in new leadership as the bank prepares to "restructure" its equity and rates trading business outside Europe amid broader cuts to its investment banking operations.
The news provoked a modest bid in DB shares, helping them erase Monday's losses.
Last night, WSJ reported that one of DB's senior European bankers, Edward Sankey, is preparing to leave after 15 years at the bank, as cuts to its investment bank "take a toll." Earlier this week, the bank said it was cancelling its 4% profitability target for 2019, which, like the 'bad bank' news, provoked a chorus of guffaws across Wall Street.
At this point, the bank needs to focus on passing the Fed's next round of stress tests, something DB doesn't exactly have a great track record of doing. But if DB is found to have failed when the results are released next week, and Sewing brings in a new CFO, at least he'll have a useful scapegoat in Von Moltke, who was appointed to the role in the Spring of 2017.