Deutsche Bank reacts to foodwatch’s criticism

Deutsche Bank announced that it would issue “no new exchange-traded investment products based on basic foodstuffs” this year. This was how the bank reacted to foodwatch’s criticism of speculation in agricultural commodities, which is driving up food prices and pushing people into hunger. The bank’s announcement, however, in no way represents a departure from the highly speculative practice of betting on food prices, with its far-reaching impact.

In its report on “social responsibility”, Deutsche Bank announced that, for the rest of the year, it would not be issuing any new exchange-traded investment products based on basic foodstuffs. According to the report, Deutsche Bank saw this response as an “especially conscientious measure”. In fact the wording “no new exchange-traded investment products based on basic foodstuffs”, by implication, means: the existing products will continue to be sold and to exacerbate the hunger crises in the world. At the same time, Deutsche Bank makes no mention of whether it plans to augment existing funds or to issue new speculative commodities funds that are traded over the counter. The announcement is obviously a blatant PR smokescreen for glossy brochures.

Josef Ackermann: “We will respond appropriately”

In October 2011 foodwatch published the report “The Hunger-Makers”, which provides evidence that food speculation drives up food prices and pushes people into hunger. In reaction Deutsche Bank CEO Josef Ackermann announced that the bank would respond appropriately. In a personal letter to foodwatch, he wrote: “No business activity is worth putting Deutsche Bank’s good reputation at risk…. If sufficient evidence can be found that the bank’s activities could in fact have the impact you described, we will respond appropriately.” Originally Deutsche Bank said that, by the end of January, it would make a decision about its possible withdrawal from food speculation. In January, however, the bank announced that it would first prepare a “comprehensive study” on the issue.

foodwatch demands a withdrawal from all food gambling activities

In its current CSR report, Deutsche Bank is once again playing down the influence of its speculative banking activities on food prices and announces that it will be conducting its own analyses, which – according to Reuters – will be published by the end of the year. However, while Deutsche Bank is making its announcements, which sound good but change little, food prices are continuing to rise as a result of the bank’s business practices.