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Deutsche Bank is losing some of its strongest financial performers amid a clampdown on bad behavior by traders, as the lender faces ongoing probes by global regulators into allegations of attempts to rig markets.
The bank has introduced a policy of no longer rewarding the best earners on the trading floor with a promotion or the highest bonuses if they are "disruptive" or are not seen as team players, in a move that is adding to the outflow of senior talent away from traditional banking into less regulated areas and boutique firms.
"We definitely are seeing leakage," Colin Fan, the lender's co-head of investment banking told the Financial Times.
"Some people are purely financially driven and they're going to less regulated spaces, maybe it's tech, maybe it's hedge funds; we wish them well. These are people that probably won't fit into the new banking environment anyway."
Fan shot to fame earlier this year after an internal video in which he scolds Deutsche traders went viral with its message that being "boastful, indiscreet or vulgar is not OK.".
Other banks are in the middle of introducing similar measures. Barclays, for example, is implementing a company-wide bonus policy this year which takes into account individual adherence to the UK bank's values and behavioral guidelines. The move picks up recommendations from an independent review last year, which blamed Barclays' bonus culture as one of the factors that led to the Libor rate manipulation scandal.
Bankers across the industry say there has been a shift in the way investment banks promote people in the wake of trading scandals that have hurt the industry's reputation, with employees needing a much wider variety of credentials to get a coveted promotion to managing director.
These include not only a stellar performance but also deeper knowledge about administrative and compliance procedures as well as being what banks like to call a good corporate citizen.
