Deutsche Bank defies criticsComment on this story
Deutsche Bank, Germany's biggest bank, found itself under fire Monday over a decision to resume trading in agricultural commodities even though the practices are blamed for driving up global food prices.
Deutsche Bank announced at the weekend that a special working group set up to assess and evaluate a string of studies on the matter had come to the conclusion that there was “no empirical evidence” to back up claims that agricultural commodities trading was to blame for soaring or widely fluctuating food prices.
Indeed, the food futures markets appeared to offer farmers and food processing industries with “a whole range of advantages,” the bank argued.
For example, they allowed producers to hedge against future price fluctuations, Deutsche Bank said.
They also acted as a valuable gauge for price developments, allowing farmers to estimate future demand more accurately and therefore plan better. And financial investors also boosted market liquidity, it argued.
“As a result, Deutsche Bank has decided in the interests of its clients to continue to offer financial instruments on agricultural commodities,” it said.
There has been much debate in Germany recently on whether it is ethical for investment banks to make billions of dollars in profits from speculation in food commodities while millions of people are condemned to live - and die - in hunger and poverty.
Indeed, the tide of public opinion has recently been turning. And in face of growing pressure, Germany's second-biggest bank Commerzbank, regional banks LBBW and LBB and the savings bank DekaBank all announced last year that they are pulling out of agricultural commodities trading and ceasing to offer such investment vehicles to their customers.
Deutsche Bank, for its part, announced last March that it was shelving a new set of investment products based on basic agricultural goods, even if its DWS investment arm would continue to offer existing products, at least for the time being.
Reacting to Deutsche Bank's latest decision, the German-based NGO, Foodwatch, slammed the move as “irresponsible” and said the bank was “making itself an accessory to driving people in the world's poorest regions into famine.” - Sapa-AFP