SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank
Annual Report 2010 on Form 20-F
Item 4: Information on the Company 44
On November 24, 2010, the European Union enacted regulations to further integrate the existing national
supervisory authorities into a European System of Financial Supervision. A European Systemic Risk Board
(ESRB) was established and the independent advisory committees to the European Commission for banks,
insurance companies and securities markets which had existed since 2004 were transformed into new European
authorities: the European Banking Authority (EBA), the European Insurance and Occupational Pensions
Authority (EIOPA) and the European Securities and Markets Authority (ESMA).
The ESRB is responsible for the macro-prudential oversight of the financial system within the EU. It will in
particular collect and analyze all relevant information, identify systemic risks, issue warnings and recommendations
for remedial action as appropriate. The secretariat of the ESRB is provided by the European Central Bank.
The tasks of EBA and the other new authorities are to further integrate and harmonize the work of the relevant
national supervisory authorities and to ensure a consistent application of EU law. To that effect they shall in
particular develop technical standards for supervision which will become effective if the European Commission
endorses them. They shall also issue guidelines and recommendations for supervisory practices and coordinate
the work of national authorities in emergency situations where the orderly functioning or integrity of the financial
markets or the stability of the financial system in the EU is jeopardized. In such case, the EBA and the other
new authorities may give instructions to national authorities and, in certain circumstances, directly to banks and
other financial institutions, to take remedial measures.
Regulation and Supervision in the United States
Our operations are subject to extensive federal and state banking and securities regulation and supervision in the
United States. We engage in U.S. banking activities directly through our New York branch. We also control U.S.
banking subsidiaries, including Deutsche Bank Trust Company Americas (“DBTCA”), and U.S. broker-dealers,
such as Deutsche Bank Securities Inc., U.S. nondeposit trust companies and nonbanking subsidiaries.
On July 21, 2010, the United States enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank), which provides a broad framework for significant regulatory changes that will extend to almost
every area of U.S. financial regulation. Implementation of Dodd-Frank will require further detailed rulemaking over
several years by different U.S. regulators, including the Department of the Treasury, the Federal Reserve Board,
the Securities and Exchange Commission (SEC), the Federal Deposit Insurance Corporation (FDIC), the Commodity
Futures Trading Commission (CFTC) and the newly created Financial Stability Oversight Council (Council), and
uncertainty remains about the final details, timing and impact of the rules.
Among other things, Dodd-Frank will limit the ability of banking entities to sponsor or invest in private equity or
hedge funds or to engage in certain types of proprietary trading in the United States unrelated to serving clients,
although certain non-U.S. banking organizations, such as Deutsche Bank, will be able to engage in such activities
solely outside the United States. Dodd-Frank also provides regulators with tools to provide greater capital, leverage
and liquidity requirements and other prudential standards, particularly for financial institutions that pose significant
systemic risk. However, in imposing heightened capital, leverage, liquidity and other prudential standards on non-
U.S. banks such as Deutsche Bank, the Federal Reserve Board is directed to take into account the principle of
national treatment and equality of competitive opportunity, and the extent to which the foreign bank is subject to
comparable home country standards.
U.S. regulators will also be able to restrict the size and growth of systemically significant non-bank financial companies
and large interconnected bank holding companies and will be required to impose bright-line debt-to-equity
ratio limits on financial companies that the Council determines pose a grave threat to financial stability. Furthermore,
Dodd-Frank provides for an extensive framework for the regulation of over-the-counter (OTC) derivatives,
including mandatory clearing, exchange trading and transaction reporting of certain OTC derivatives, as well as