SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank Item 3: Key Information 13
Annual Report 2010 on Form 20-F
Already-enacted legislation includes the Dodd-Frank Wall Street Reform and Consumer Protection Act (the
“Dodd-Frank Act”) enacted in the United States in July 2010.The Dodd-Frank Act has numerous provisions that
could affect our operations. Although there remains uncertainty as to how regulators will implement the Dodd-
Frank Act, various elements of the new law may negatively affect our profitability and require that we change
some of our business practices, and we may incur additional costs as a result (including increased compliance
costs). These elements and their effects may also require us to invest significant management attention and
resources to make any necessary changes in order to comply with the new regulations.
For some proposals for financial industry reform, formal consultations and impact studies have begun, while
other proposals are only in the political debating stage. It is presently unclear which of these proposals, if any,
will become law and, if so, to what extent and on what terms. Therefore, we cannot assess their effects on us
at this point. It is possible, however, that the future regulatory framework for financial institutions may change,
perhaps significantly, which creates significant uncertainty for us and the financial industry in general.
Effects of the regulatory changes on us may range from additional administrative costs to implement and comply
with new rules to increased costs of funding and/or capital, up to restrictions on our growth and on the businesses
we are permitted to conduct. Should proposals be adopted that require us to materially alter our business model,
the resulting changes could have a material adverse effect on our business, results of operations and financial
condition as well as on our prospects.
Operational risks may disrupt our businesses.
We face operational risk arising from errors, inadvertent or intentional, made in the execution, confirmation or
settlement of transactions or from transactions not being properly recorded, evaluated or accounted for. Derivative
contracts are not always confirmed with the counterparties on a timely basis; while the transaction remains
unconfirmed, we are subject to heightened credit and operational risk and in the event of a default may find it
more difficult to enforce the contract. The recent financial crisis, in which the risk of counterparty default has
increased, has increased the possibility that this operational risk materializes.
Our businesses are highly dependent on our ability to process, on a daily basis, a large number of transactions
across numerous and diverse markets in many currencies and certain of the transactions we process have
become increasingly complex. Consequently, we rely heavily on our financial, accounting and other data
processing systems. If any of these systems do not operate properly, or are disabled, we could suffer financial
loss, a disruption of our businesses, liability to clients, regulatory intervention or reputational damage.
In addition, despite the contingency plans we have in place, our ability to conduct business may be adversely
impacted by a disruption in the infrastructure that supports our businesses and the communities in which we
are located. This may include a disruption due to terrorist activities, or disease pandemics, as well as disruption
involving electrical, communications, transportation or other services used by us or third parties with whom we
conduct business.
The size of our clearing operations exposes us to a heightened risk of material losses should these
operations fail to function properly.
We have large clearing and settlement businesses. These give rise to the risk that we, our customers or other
third parties could lose substantial sums if our systems fail to operate properly for even short periods. This will
be the case even where the reason for the interruption is external to us. In such a case, we might suffer harm
to our reputation even if no material amounts of money are lost. This could cause customers to take their business
elsewhere, which could materially harm our revenues and our profits.