Deutsche Bank CFO: All Is Lost

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Stefan Krause has faced up to the fact that the hedge funds will inherit the earth.

Hedge funds are luring bankers with prospects for better pay and will probably benefit as stricter capital rules push lenders to give up some businesses, Deutsche Bank AG Chief Financial Officer Stefan Krause said.

“There are businesses based on our capital regulation we’ll not be able to do” that “hedge funds will be able to,” Krause, 50, said today at a conference in Berlin. “If I had to bet who is going to benefit the most post-crisis from the asset appreciation you have coming, then certainly hedge funds….”

“Our business is people-contingent and you’ll never be able to not pay competitively,” he told bankers attending the conference. “What you can do is structure your pay differently so it’s longer-term oriented.”

Most of the bankers that leave Deutsche Bank, continental Europe’s biggest lender by assets, move to hedge funds, according to Krause.

Hedge Fund Pay Lures Bankers Amid Regulation, Deutsche Bank Says [Bloomberg via SFGate]

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