Deutsche Bank boss John Cryan calls on banks to adopt common sense

Deutsche Bank chief John Cryan said a lack of “common sense” from bankers had made lenders “too complicated to manage”.

The Briton, who is trying to slim down the bloated German lender, told Davos that investment bank deals had added complexity but not value, fuelling the 2007-08 crisis and fears the sector had become too big and powerful. “It’s not too big to fail; a better formulation would be too complicated to manage.

“If all we did was take deposits and buy US Treasuries we could be very big and simple,” he said. “We proliferated the products. Parts of our business took sizeable concentrated risks. We didn’t apply common sense.”

Cryan said stress-testing balance sheets was the best way to prevent another banking crisis, adding he was a “big fan” of the tests.

Deutsche agreed to pay $7.2 billion (£5.9 billion) last month to settle a long-running US probe into the sale of complex mortgage-backed products between 2005 and 2007. Shares have been hit by fears of thin capital buffers, leading to speculation Deutsche may have to raise money by selling assets.