Trading on the German stock exchange stands still for over four hours

Bull and bear in front of the Frankfurt stock exchange

A bug in the T7 electronic trading system led to the longest trading failure in many years on Tuesday.


(Photo: dpa)

Frankfurt, Dusseldorf The stability of their trading systems is for that German Stock Exchange essential. “Our capital is the trust of the market participants in us and our systems,” says CEO Theodor Weimer.

But it was precisely in the hectic times of the corona crisis that Germany’s largest stock exchange operator suffered the biggest breakdown in years on Tuesday. On Tuesday, a large part of the trade stopped for more than four hours from 9.25 a.m. The reason for the interruption was a technical problem with the electronic trading system T7, said a spokesman for the German stock exchange. “An error in the internal communication of the trading system triggered the problem.”

The default affected both equity trading via Xetra and derivatives trading in the most important division, Eurex. In addition, electronic trading did not work on many other stock exchanges that use the Hessen system. These include the trading centers in Vienna, Prague, Budapest, Zagreb, Ljubljana, Sofia and Malta.

In Frankfurt, the floor trading was not affected by the breakdown. However, it has only played a subordinate role for years. More than 90 percent of German stock trading is done electronically.

According to the German stock exchange, trading on the Eurex started again at 1.45 p.m., electronic stock trading on Xetra at 1:50 p.m.

For the company from Eschborn near Frankfurt, it is the worst breakdown in years. Compared to breakdowns at banks, failures at Deutsche Börse are rare. System availability at Eurex was 99.97 percent in the past twelve months.

Weimer hates failures “like the plague”

Most recently, there were two failures in the public eye, which were shorter than the current breakdown. On October 15, Xetra trading began an hour later due to technical problems, and on March 16, 40 minutes late.

The latter breakdown was particularly annoying for Deutsche Börse, after all, the group had proclaimed “Share Day” this Friday in March, where private investors could buy Dax shares and index funds free of charge. In addition, the IPO scheduled for that day was delayed due to the breakdown Siemens-Medical technology daughter Healthineers.

The head of Deutsche Börse Weimer was visibly uncomfortable. “A stock exchange boss hates it like the plague when there are network problems or software problems,” said Weimer a little later in the Handelsblatt interview.

The breakdown in March 2018, according to Weimer, was due to the fact that logging in of several customers’ trading applications to the system resulted in a blockage for all customers. “Such incidents are ugly, but not really worrying,” said Weimer. “What really worries me is massive cyberattacks on all corporate systems, including ours.”

However, the trading failure on Tuesday was not due to a hacker attack, said a spokesman for the Deutsche Börse Group – and thus rejected corresponding speculation on dealer platforms.

Many investors were annoyed by the failure. An hour-long disruption “is unfortunately not acceptable for an exchange,” wrote a user on Twitter. Another took it with humor and asked chief engineer Scotty from the Star Trek science fiction series for help.

More: Private investors are particularly affected by breakdowns in the certificate trade.

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Stock exchange chief Weimer becomes a member of the supervisory board of Deutsche Bank

Deutsche-Börse boss Theodor Weimer moves into the supervisory board of Deutsche Bank. The 60-year-old is to succeed Katherine Garrett-Cox (52), who will resign from the 2020 Annual General Meeting, Deutsche Bank said on Friday. According to insiders, Weimer is considered a potential candidate to succeed Paul Achleitner, who wants to stop in 2022.

In January, Deutsche Bank nominated ex-SPD boss Sigmar Gabriel for its supervisory board. Gabriel was legally appointed as a supervisory board in March and will also stand for election at the shareholders’ meeting.

Weimer has been CEO of Deutsche Börse since January 2018. The former head of Hypovereinsbank had taken over the management of the exchange operator after a turbulent year: In 2017, the planned merger of Deutsche Börse and the London Stock Exchange (LSE) failed; a compensation program tailored to the then CEO, Carsten Kengeter, investigated the Frankfurt prosecutor’s office for possible reasons Insider trading after itself. Weimer made the turnaround and most recently reported a billion profit for 2019.

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The head of Deutsche Börse is to become the supervisory board of Deutsche Bank

Frankfurt The Deutsche Bank wants the CEO of the German stock exchange, Theodor Weimer, be elected to the Supervisory Board. Weimer is to replace Katherine Garrett-Cox, who will step down at the shareholders’ meeting, like Deutsche Bank with publication of their annual report announced.

“With Theodor Weimer, who is to move into the supervisory board, we gain an expert in the German and European financial industry and an outstanding banker for the supervisory board of Deutsche Bank”, said Paul Achleitner, the chief controller of the bank.

The personnel is significant: With Weimer, a candidate has been moving into the bank’s supervisory board for the first time in a long time, which has the format to replace Achleitner at the head of the committee after his contract expires in spring 2022.

However, it is also clear that Weimer would have to give up his senior position at Deutsche Börse early if he wanted to become chief controller of Germany’s largest money house. “As long as Mr. Weimer is chairman of the board of the German stock exchange, a position as head of the supervisory board is out of the question,” said a spokeswoman for the stock exchange. Weimer should move as a simple member to the supervisory board of Deutsche Bank, she emphasized. “The question of the chairmanship of the supervisory board does not currently arise.”

According to financial circles, Weimer received the green light from the head of the German Stock Exchange, Joachim Faber, for the candidacy for the Deutsche Bank supervisory board. Within the company, many hope that the CEO will fulfill his contract, which will run until the end of 2024 – after all, he only extended the contract in mid-February.

Experts warn of conflicts of interest

Weimer is very well connected in politics and the financial sector. He also worked for many years in management positions at banks, for example as head of the UnicreditSubsidiary Hypo-Vereinsbank or as a partner of Goldman Sachs in investment banking.

For experts, there is no question that he, as a member of the Supervisory Board, is a technical asset for Deutsche Bank. “Even if I do not like to comment on names, but it is an excellent choice !!!”, banking professor Sascha Steffen commented on Twitter. “We see Mr. Weimer’s nomination as fundamentally positive, because he has the necessary industry expertise and a high reputation,” said Vanda Heinen, an analyst specializing in corporate governance at Union Investment. “In order not to be accused of accusing the office, Mr. Weimer should resign from the supervisory board of FC Bayern Munich,” she warned.

Other experts warn that there may be conflicts of interest because Deutsche Bank is a major customer of Deutsche Börse. As head of the stock exchange, Weimer is very interested, for example, that Deutsche Bank will in future process more derivatives transactions in Frankfurt than in London.

“Theodor Weimer is undoubtedly an asset to the Supervisory Board of Deutsche Bank. But as long as he is the head of Deutsche Börse, this is a crystal-clear conflict of interests, ”said Ingo Speich, head of sustainability and corporate governance at Deka Investment, the Handelsblatt. The head of the exchange must be as neutral as possible.

It is unclear whether and how this finding will affect Deka Investment’s voting behavior at the Annual General Meeting. “We are examining whether and what that means for our voting behavior at the Deutsche Bank Annual General Meeting,” said Speich. Deka is one of the top 20 investors in Deutsche Bank.

“The question of a possible conflict of interest should have been clarified in advance with the supervisory authorities so that the Zeltner case does not repeat itself,” said Union Investment expert Heinen. Financial circles say that Deutsche Bank discussed the personnel with the supervisors before the announcement. In addition, the stock exchange is not a direct competitor of Deutsche Bank, so any conflicts of interest can be managed without major problems. A taste would probably still remain with some decisions.

Deutsche Bank has recently had bad experiences with conflicts of interest on the Supervisory Board. Jürg Zeltner, former head of wealth management at UBS, had to say goodbye to the control committee again after a few weeks. The supervisors had put pressure on him because Zeltner worked as a boss and investor at the Luxembourg private banking group KBL for a direct competitor of the Frankfurt money house.

The rumor that Weimer could one day succeed Achleitner has been circulating in Frankfurt for many months. When Weimer was contacted internally at Deutsche Börse, he reacted annoyed. At the annual press conference in February, he said he hadn’t thought about what to do after his contract expired in 2025. “I don’t have that much strategic thinking on my own behalf.”

The top earner receives 13 million euros

Weimer joins Deutsche Bank in a phase in which it is part of the largest corporate restructuring in its history. 18,000 jobs are to fall victim to this. The bonus pool for employees has also been reduced. The bank will pay a total of 1.5 billion euros in bonuses to its approximately 88,000 employees for the past financial year, as the bank’s annual report shows. That is around 22 percent less than the 1.9 billion euros for 2018.

However, Deutsche Bank has already fired many of the usually high-paying investment bankers. This is another reason why the bank has 583 fewer income millionaires than a year ago. At that time, 643 employees received total remuneration of more than one million euros.

A German banker – who is not mentioned by name in the annual report – no longer has to worry about the unpredictable consequences of the corona virus for Deutsche Bank and the entire financial industry: his total remuneration for 2019 amounts to more than 13 million euros.

The total salary of the anonymous top earner is thus as high as the total variable remuneration of the Executive Board in the past year. Despite the loss of billions in 2019, the bank’s management board will receive a total bonus of EUR 13.3 million, which is around half as much as in the previous year when the top managers received EUR 25.8 million in bonuses. Including fixed salary and allowances, the board of directors received 34.8 million euros from CEO Christian Sewing after 52.2 million in the previous year. Sewing itself received five million euros – two million less.

There will be no vote on the remuneration system at the Annual General Meeting this year. This is due to the new shareholder rights guideline, which only came into force in December 2019 and necessitates adjustments to the remuneration system. At the 2021 shareholders’ meeting, the Supervisory Board will then let the shareholders vote again on the compensation structures.

Little news about Corona

The statements made by the bank in its annual report on the corona crisis and its economic impact were less informative than the personnel decisions. The term Covid-19 occurs exactly 31 times on the 517 pages. However, the letter from CEO Christian Sewing only says: “The positive trend of the fourth quarter of 2019 continued at the start of the year. However, what the Covid 19 pandemic means specifically for the global economy and for our bank cannot be predicted at this point in time. ”

The bank’s perspective is at least a little more specific. The money house there warns that “we can be significantly affected by a sustained downturn in local, regional or global economic conditions”. Given the uncertainty about the spread, duration, and market impact of Covid-19, the forward-looking assumptions currently did not take into account any potential impact.

In the past year, the radical reconstruction caused a loss of 5.7 billion euros. Sewing had promised investors a black zero for operating profit in 2020, but that was before the pandemic questioned all plans.

More: Deutsche Bank under stress: Corona crisis makes conversion a race against time.

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