Interview WitH Karl von Rohr

Werte / N° 21

“We need to

adapt our

behaviour to

the global


President of the Deutsche Bank KARL VON ROHR is calling for more European unity, honest information about the consequences of low interest rate policies and an even stronger focus on sustainable investment

The rapidly escalating climate change is increasingly com- pelling politicians and industry to take action. What changes can Deutsche Bank make?

There are plenty. Naturally, our starting point has to be our own climate footprint. By purchasing CO2 certificates to offset our emissions, we have been climate-neutral since 2012. But of course, we also want to support our clients during the transformation to a lower carbon economy. For this reason, we won’t be getting rid of any clients just because they have a particular carbon footprint – possibly one that is too large. Rather, we will help them to reduce this footprint. This is an issue that affects just about every compa- ny: I’m convinced that, in just a few years’ time, a company’s sus- tainability rating will be just as important as its credit rating.

You have four children, who are close in age to the young peo- ple participating in the Fridays for Future movement. How does climate change touch you personally?

I talk about it with my children, which gives me a different per- spective, causing me to rethink aspects of my own stance. And I’m aware that there’s plenty I can learn from my children.

For example?

Before a family gathering, I said to my daughter: “Take a plane, that way you’ll get to us more quickly on Christmas Eve.” She im- mediately said she’d rather take the train, which would get her into Frankfurt an hour later – we’d just have to work around that, she said. And she was absolutely right.

Criticism of various popular activities in light of the climate debate is often presented as an attempt to deprive individuals of their liberty. Do you see it that way?

No. We should all be prepared to question our behaviour. Changing our habits will be an important way of slowing down climate change. That’s not always easy of course, and it won’t happen from one day to the next. But we have a responsibility to the next gener- ation to engage with the issues more seriously.

The Club of Rome warned in its 1972 report “The Limits to Growth” that the continuous expansion of the economy would eventually lead to disaster. What needs to happen to bring about real change?

I fear that that will only happen when all of us become more dras- tically aware of how climate change is suddenly having a profound impact on our daily life, if not completely turning it upside down. So far, many of us only notice that storms are getting more violent, summers are getting hotter... a few hot, dry summers in a row aren’t enough to make us rethink?

No. However, things are starting to change, and that has a lot to do with the last two – very hot – summers. When I drive through the woods, particularly where there are coniferous trees, I do feel un- easy – because many of the trees are dead, or at least diseased. At the same time, we know how desperately we need forests. Recog- nising this fact has prompted many people to take part in tree- planting campaigns or to support these financially. This is some- thing we as a bank are also involved in. So far, our staff have plant- ed more than 90,000 trees, and we – just Deutsche Bank on its own – want to get to 150,000 worldwide by the end of 2020.

The transformation of the economy needs to happen a lot faster. Highly complex companies and corporations have structures that can make change very slow. How do you assess their capacity to transform themselves?

That’s similar to the situation for highly complex societies: it’s not straightforward. Within such structures, you can only drive change if you talk about important issues frankly and repeatedly. That’s the only way to get people to start thinking about them. There has been criticism of Fridays for Future, but I respect the fact that the movement has succeeded in getting climate change into the con- sciousness of a lot of people around the world, and that they are being so persistent in their campaigning.

Do you sense that sustainability is also becoming increasingly important to Deutsche Bank’s clients?

Definitely, and that applies to both our corporate and private clients. It’s particularly the case for companies operating in cli- mate-relevant industries, who are having to transform themselves because they can no longer get funding for certain developments. In addition, we are noticing that younger people coming into in- heritances are thinking more about how to invest their wealth sustainably.

Besides the climate crisis, what other megatrends do you think we can expect to see in the coming years?

The next decade will also be defined by the new geopolitical con- stellation, which has led to a sort of Cold War 2.0 between the two major powers, the US and China. A key factor in this battle for eco- nomic dominance is who has economic supremacy in the technolo- gy sector. Ultimately, industrial revolutions have been successful in places where new technologies were developed, or where success- ful infrastructure was put in place, such as rail and electricity net- works. Tomorrow, the dominant forces will be those that have de- veloped technological expertise and digital infrastructure.

Isn’t economic supremacy also gained on the basis of size, of market size?

In my view, this is key to survival. Germany will find it difficult to compete on its own. With our population of 83 million, we are sim- ply too lightweight. 450 million EU citizens, on the other hand, have a better chance against 330 million Americans and 1.4 billion Chinese. The same applies to all those hopeful start-ups – the faster they scale up their business models, the more successful they are. A technology company in Germany serves a small market, whilst in China it has 1.4 billion potential customers. This is why it is so important for us in Europe to achieve more unity, in order to create a larger European domestic market and to be a stronger presence on the world stage.

Even if Europe does manage to work together more, wouldn’t we still be a lightweight when compared with China?

That’s why I have a strong preference for going back to a proper transatlantic partnership with the USA.

Wouldn’t a closer alliance with Russia also be an option in or- der to become stronger?

We should cultivate our relationship with Russia, primarily in po- litical terms, but also on an economic level. The formation of blocs is not helpful – it facilitates neither peace nor common economic development. Since the mid-1980s, we have made huge progress in globalisation and securing peace. At the moment, we are falling back into isolated, nationalistic ways of acting.

Let’s talk about another issue that is increasingly having an impact on our lives – the European policy of low interest rates ...

... a topic of underestimated social and political import that we should be taking very seriously. On the one hand, low interest rates make it difficult to accumulate wealth, and on the other hand, they have a detrimental impact on the pension system. If negative in- terest rates persist, this situation is only going to get worse and divide society. Those who can afford it will borrow in this low in- terest environment, buying property and thereby investing shrewdly. Meanwhile, the larger proportion of the population will have to stand by and watch as their savings shrink from one year to the next and housing becomes increasingly unaffordable. This could become a serious problem in the next ten years.

Don’t you have any hope that there could soon be a reversal of this trend?

Unfortunately, I am not particularly optimistic at the moment that this will happen any time soon.

Is there a need to explain this to your clients? Or does that amount to opening a can of worms?

It is our duty as a financial service provider to discuss this topic with our clients – and that means all client groups, regardless of their available capital. After all, as a bank, we are close to the sub- ject matter. We have the necessary information, we can offer in- vestment alternatives, and we are also in a position to speak to politicians about potential ways out of this dilemma. We are helped in this by the fact that we have relationships with the majority of our clients that run across several generations. This creates trust and gives us the opportunity to speak to our clients about how they can restructure their assets in order to invest their deposits in products with higher returns.

Experts also recognise that the low interest rate policy presents a danger that more risky capital investments will be pursued as a result of banks lending more readily. What is your view on this?

Of course it’s true that in phases of low interest rates, you’ve got to be careful that bubbles don’t develop and that you aren’t adding undue credit risks to the balance sheet. Just think of the discus- sions here in Germany about a potential property bubble. I haven’t seen that so far. But if you look at the development of property prices in some cities, we are getting close to a peak, in my view – and if interest rates stay low in the long term, then the dangers will increase.

You don’t see any dangerous bubbles currently?

No. However, I am convinced that we as a bank must continue to abide by our high standards when it comes to risk. Investors, on the other hand, have to take more risks to get the same returns that they would have got three to five years ago. It used to be pos- sible to get returns on your savings without risk, but those times are gone. Instead, investors will have to consider high-grade bonds – for example, emerging market bonds or corporate bonds, de- pending on an individual’s risk appetite. Those who are willing to

take greater risks can consider shares, either as a direct invest- ment or more widely spread across actively managed funds or ETFs, including in the form of savings plans. Our task at Deutsche Bank is to talk to investors about what risks they can tolerate and what we can offer them based on this.

Deutsche Bank celebrates its 150th birthday this year. What can you learn from the past?

The Deutsche Bank of the future will be different to that of the re- cent past in several respects. It will be more strongly geared to- wards its founding principles – namely connecting German and other European companies with the world and facilitating en- trepreneurial visions and ambitions.

So it’s back to the roots?

Yes, in a sense. Of course, we are becoming increasingly digitalised and are gradually transforming into a platform that will allow us to be the first port of call for our clients – for all financial matters, but also for topics that go above and beyond these. In general though, our clients will continue to expect much the same from us as before: they want us to be their risk manager and investment advisor. We can already see that today in our clients’ behaviour: people do their internet research and compare what’s on offer, but when it comes to making important decisions, they want to talk to their advisor – and that isn’t going to change.

Interview: Martin Häusler, Leonard Prinz

PHotos: Maurice Haas

In a few years’ time, the sustainability rating of a company will be as important as its credit rating is today



Von Rohr

Born in Essen in 1965, he studied law at the universities of Bonn, Kiel and Lau- sanne, and at Cornell University in the USA. Since 1997, he has held various senior management roles at Deutsche Bank. Karl von Rohr joined the Management Board in 2015 and was made President in 2018. He is the father of four children.

The formation of blocs is not helpful – it facilitates neither peace nor common economic development


If negative interest rates persist, the situation is only going to get worse and divide society