SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank
Annual Report 2010 on Form 20-F
Item 4: Information on the Company 41
Enforcement Powers
The BaFin has a wide range of enforcement powers in the event it discovers any irregularities. It may remove
the bank’s managers from office, transfer their responsibilities in whole or in part to a special commissioner or
prohibit them from exercising their current managerial capacities. The BaFin may also cause the removal of
members of the supervisory board of a bank if they are not reliable, lack the necessary expertise or violate their
duties.
If a bank’s own funds are inadequate, if a bank does not meet the liquidity requirements, or if, based upon the
circumstances, the BaFin concludes that a bank will likely not be able to continuously fulfill the statutory capital
or liquidity requirements, the BaFin may take a variety of measures in order to improve the capitalization or
liquidity of the bank. In particular, the BaFin may prohibit or restrict a bank from distributing profits, taking balance
sheet measures in order to offset an annual loss or to generate distributable profits, making payments on instruments
that constitute own funds if such payments are not covered by the bank’s annual profit, or extending
credit. The BaFin may also order a bank to adopt certain measures to reduce risks if such risks result from
particular types of transactions or systems used by the bank. Generally, these enforcement powers also apply
to the parent bank of a group of institutions in the event that the own funds of the group are inadequate on a
consolidated basis.
If a bank is in danger of defaulting on its obligations to creditors, the BaFin may take emergency measures to
avert default. These emergency measures may include:
— issuing instructions relating to the management of the bank;
— prohibiting the acceptance of deposits and the extension of credit;
— prohibiting or restricting the bank’s managers from carrying on their functions;
— prohibiting payments and disposals of assets;
— closing the bank’s customer services; and
— prohibiting the bank from accepting any payments other than payments of debts owed to the bank.
In order to ensure compliance with applicable supervisory law, the BaFin may also appoint a special representative
and delegate the responsibilities and powers of corporate bodies of a bank to such special representative
if certain conditions are met.
If these measures are inadequate, the BaFin may revoke the bank’s license. Only the BaFin may file an application
for the initiation of insolvency proceedings against a bank.
Violations of the Banking Act may result in criminal and administrative penalties.
Restructuring Powers
The Restructuring Act (Restrukturierungsgesetz) of December 9, 2010 introduced new powers for the BaFin to
effect or facilitate the stabilization, reorganization or restructuring of banks from January 1, 2011 on.
If, based upon the circumstances, it is likely that a bank will not be able to continuously fulfill the statutory capital
or liquidity requirements, the bank may submit a stabilization plan to the BaFin. A stabilization plan may in
particular provide for the taking up of new loans or other financing that will have priority over the claims of existing
creditors if insolvency proceedings are opened within three years following the commencement of the stabilization
proceedings. The aggregate amount of such loans may not exceed 10 % of the bank’s own funds. If the
BaFin considers the stabilization plan to be sustainable, it applies to the court for the opening of a stabilization