News 09.08.2012

Commerzbank next to withdraw

Commerzbank, Germany’s second largest bank, is withdrawing from food speculation. The financial institution’s commodity funds have already been revamped and no longer contain any agricultural products. This withdrawal represents Commerzbank’s reaction to the debate over a series of studies showing that investment in such commodity funds drives up food prices, thereby contributing to hunger crises in many parts of the world.

No more food speculation: Commerzbank has removed all agricultural products from its commodities fund ComStage ETF CB Commodity EW Index TR and will refrain from setting up any new exchange-traded investment products based on basic foodstuffs. Commerzbank told foodwatch that its decision was made as a precautionary measure.

Three have withdrawn – what will Deutsche Bank do?

DekaBank (central asset manager of the German Savings Banks Organisation) and the Landesbank Baden-Württemberg (LBBW) have also announced plans to refrain from speculation in agricultural commodities. The revamping of the Commerzbank fund was implemented on 30 July 2012. foodwatch called on other banks, above all Deutsche Bank as Germany’s leading investment house, to follow the example of the second largest bank in Germany. For over the past several months, while Deutsche Bank’s committees have supposedly been reviewing the bank’s food speculation activities, its products have continued to push people into poverty and hunger. Under the bank’s new joint chief executives, Jürgen Fitschen and Anshu Jain, the promised review of practices seems to have been put on the back burner.

No response from the Jain-Fitschen joint leadership

After the foodwatch report “The Hunger-Makers” was published in October 2011, Josef Ackermann, CEO of Deutsche Bank at the time, agreed to a prompt review of the bank’s practices. However, the bank repeatedly postponed the date promised for the release of its report on the impact of its speculative commodities investments, as well as its decision regarding possible consequences – in the end, Mr Ackermann promised to release the report by the end of 2012. His successors, Anshu Jain and Jürgen Fitschen, have yet to confirm this target date; an enquiry sent by foodwatch to the two CEOs right after they assumed their new posts was never answered.

Precautionary principle should also be applied politically!

In addition, foodwatch has called upon German MEP Markus Ferber (CSU), as European Parliament rapporteur for the regulation of financial markets (MiFID Directive), to take an unequivocal stand against excessive speculation in foodstuffs. After all, the precautionary principle has constitutional status in the EU – and, therefore, it is simply unacceptable that only a few individual banks are opting to stay away from speculative investment in agricultural commodities for precautionary reasons while European policymakers refrain from precautionary intervention, watching passively as all the other banks engage in these dangerous gambling practices.