Deutsche Bank's top
economist favors Trump over status quo
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[January 10, 2017]
By Frank Siebelt
(Reuters) - Deutsche Bank's top economist said U.S.
President-elect Donald Trump will be an improvement on "a mediocre
status quo" and drive economic growth in the country higher.
"We will see a move from dogma to pragmatism," David Folkerts-Landau
said at a dinner with journalists on Monday, forecasting U.S. economic
growth in 2018 would be more than double the 1.5 percent seen for 2016.
"While Trump introduces higher uncertainty, this is better than the near
certainty of the continuation of a mediocre status quo," Folkerts-Landau
wrote in a presentation for the event in Deutsche Bank's striking glass
skyscraper, which is prominent on Frankfurt's skyline.
Following a divisive election campaign, president-elect Trump has
assembled a cabinet of top officials that includes business leaders and
three retired generals, which Folkerts-Landau described as a "business
"We will see a much more flexible approach to taking decisions," he
Deutsche Bank, along with other banks, has had a troubled recent history
in the U.S. and last year agreed to a $7.2 billion penalty over toxic
mortgage securities, after an initiative launched by U.S. President
Barack Obama to pursue banks for selling sub-prime debt without warning
of the risks.
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Head of Research and member of the Group Executive Committee of
Deutsche Bank AG David Folkerts-Landau arrives for the Frankfurt
Finance Summit in Frankfurt March 19, 2013. REUTERS/Lisi Niesner
banks hope that Trump will take a more friendly approach to the industry, which
has come under intense scrutiny following the financial crisis.
Deutsche Bank, Germany's biggest lender, has alienated many Germans by its
aggressive pursuit of investment banking. Last year, its U.S. arm, where roughly
one in ten Deutsche Bank staff are based, racked up a loss of 2.8 billion euros
($3 billion) - almost half the total loss made by the group.
The bank has also been involved directly with Trump, with U.S. filings showing
it has lent his business empire at least $180 million. That includes loans made
in 2012 and 2015 that run until 2023 and 2024 respectively.
Deutsche Bank declined to comment on these loans.
(Writing by John O'Donnell; Editing by Alexander Smith)
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