James Moore: Deutsche Bank's future is not in</p><p>its own hands

its own hands

So boring banking does work, as Deutsche Bank showed yesterday, pulling off a rare feat for a bank right now of producing numbers that were rather better than expected.

The boring retail bit did all the hard work and, thanks to the acquisition of Deutsche Postbank, there are now 29 million customers who'll be hoping that the Deutsche is right to say the investment bank (just profitable with job losses expected) has been "de-risked".

But there are other questions facing Deutsche – not least from the sovereign debt crisis. Deutsche's Greek bonds, for example, are valued at 46 per cent of their notional value. It's debt from Europe's "Club Med" that has shaken confidence in Europe's banks, leading to the vexed question of capital, and how much they need to hold to reassure customers.

Deutsche's chief financial officer Stefan Krause sought to reassure the bank's shareholders, saying he saw no need for more even after the European Banking Authority's tougher stress tests.

We'll see about that. There are plenty of analysts willing to say, "Oh yes you do" in response to Mr Krause's, "Oh no we don't". The view that really matters is that of the regulator watching over the Punch and Judy show. With Deutsche admitting grim consequences if there is no credible resolution to the sovereign debt crisis, the bank's future is not exactly in its own hands.

Colour code could shed light on risky business

An example of the trouble that can be caused by an investment bank which has not been "de-risked" was provided by UBS. Its apparently healthy profit was largely because of the figures being massaged by a number of accounting quirks. They couldn't altogether hide the continuing impact of its rogue-trader scandal.

It is the ability of traders to blow huge holes in their employers' balance sheets that tends to worry small depositers whose savings are put at risk as a result. Maybe it's time to better inform them about the nature of the businesses with which they deposit their hard- earned. Perhaps with a traffic light system, like the one operated by the Association of British Insurers for corporate governance purposes.

For banking, green could indicate that a business is strongly capitalised and the business is low risk and a bit boring. Amber might say this institution is basically OK but it does have some risky businesses you might like to think about. Or it might not be as strongly capitalised as some. Red would mean deposit at your peril.

Governments and regulators would run a mile before involving themselves in such a system, even though states these days own large parts of Europe's banking system. Just imagine the wailing of those categorised as "red". But surely this idea could be taken up by, say, a savvy consumer group?