Collins, Business Ethics 3e
SAGE Publishing, 2021
Test Bank
CASE STUDY 7: DEUTSCHE BANK’S PATH BACK TO PROFITABILITY: FROM
CORRUPTION TO COMPLIANCE
Multiple Choice
1. Deutsche Bank’s history of scandals dates back to World War II when it was accused
of ______.
a. paying military service members to perform certain ethically questionable tasks
b. posting anti-government propaganda widely in German communities
c. engaging in practices complicit with the Nazi regime
d. siphoning money from consumer accounts and placing it into employee accounts
2. Which of the following was the original purpose of Deutsche Bank?
a. facilitate trade between Germany and other countries
b. support Jewish-owned businesses
c. provide financial support for German political parties
d. become the first bank to support all of Europe
3. Which of the following represents a consequence of Deutsche Bank’s listing on the
New York Stock Exchange in 2001?
a. Their stock went public and became more expensive.
b. The size of their employee base more than tripled in size.
c. They declared themselves exempt from American tax laws.
d. They became subject to the laws within the United States.
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SAGE Publishing, 2021
4. What is LIBOR defined as?
a. a benchmark rate that banks charge one another for short-term loans
b. a set of principles that banks must adhere to or be extensively fined
c. the exam that bank employees must pass before they are authorized to work with
funds and assets
d. the amount of policy violations that banks are allowed before they face governmental
shutdown
5. The Russian mirror trading scandal gained international attention because it was
believed that the money used for the trades came from ______.
a. off shore investments
b. American president Donald Trump
c. friends and family of Russian leader Vladimir Putin
d. bank employees themselves
6. What role did Deutsche Bank play in the Jeffrey Epstein scandal?
a. They continually loaned money to, and traded currencies for, Epstein, despite
Epstein’s solicitation of underage prostitutes.
b. They falsified testimony in the Epstein sex trafficking trial.
c. They covered Epstein’s attempts to embezzle money from his employer.
d. They unethically provided bail money for Epstein when he was accused of sex
trafficking abroad.
Collins, Business Ethics 3e
SAGE Publishing, 2021
7. By 2011, Deutsche Bank had become the top bank for initial public offerings in
______.
a. the United States
b. Germany
c. China
d. all of Europe
8. How did Deutsche Bank make such significant market progress between 2001 and
2011?
a. bribes and political hires
b. employee training
c. running competition out of business
d. diversifying services
9. Why was Deutsche Bank’s $125 million dollar loan to President Donald Trump in
1998 a risky financial move?
a. Private banks are not allowed to lend funds to future presidents.
b. Trump’s attorney warned bank executives that he had no intention of paying the loan
back.
c. Trump had already declared bankruptcy twice and left banks with loans unpaid by
that point.
d. Trump was in collusion with the Russians, a group that Deutsche Bank had vowed to
avoid, when the loan was made.
Collins, Business Ethics 3e
SAGE Publishing, 2021
10. Why did Deutsche Bank continue to lend Donald Trump money after several
bankruptcies?
a. They suffered from poor internal communication among their divisions.
b. They were hopeful that when Trump became President of the United States, he
would be able to pay off the loans.
c. They were trying to live by the notion of “low risk, low reward.”
d. The Russian government had promised to pay the funds back if Trump himself could
not.
11. Why did Deutsche Bank consider selling President Donald Trump’s loans on the
open market during the 2020 election season?
a. They realized that as president, Trump would not have the revenue to pay the loans.
b. They worried a Congressional loan investigation would garner negative publicity for
them.
c. They were trying to move away from the lending market and move toward real estate
investing.
d. They were against Trump’s policies and did not wish to have him as a client anymore.
12. How did the United States recovery from the financial crisis of 2008 compare to the
European recovery?
a. The U.S. recovery was more vigorous than Europe’s, but it was also more uneven.
b. The United States and Europe enjoyed similar recoveries from the 2008 financial
slump.
c. Europe initially had a more substantial recovery, but both regions eventually
recovered equally.
d. The U.S. recovery was more substantial than Europe’s but only for large
corporations.
Collins, Business Ethics 3e
SAGE Publishing, 2021
13. How does a US border tax designed to keep manufacturing within the United States
impact free global trade?
a. The border tax encourages greater free global trade.
b. The border tax maintains as table level of free global trade.
c. The border tax stifles free global trade.
d. The border tax facilitates free global trade, but only for developed nations.
14. How did the Dodd-Frank legislation of 2010 affect banks like Deutsche Bank?
a. This legislation was financially costly to banks like Deutsche Bank.
b. This legislation placed banks like Deutsche Bank in a position to file bankruptcy.
c. This legislation forced banks like Deutsche Bank to hire thousands more employees.
d. This legislation increased the number of whistleblowers within the ranks of banks like
Deutsche Bank.
15. Following the 2008 financial crisis, some governments increased regulatory
compliance requirements, but one downfall of these is that they ______.
a. increase compliance risk
b. lay off employees
c. are more expensive
d. are financially implausible for small banks
Collins, Business Ethics 3e
SAGE Publishing, 2021
16. Which of the following adequately describes the idea of compliance risk?
a. If banks do not follow regulatory laws and requirements, fines may be levied against
them.
b. Employees may be put in prison if they do not comply with federal banking
guidelines.
c. Only certain banks may be in business per capita. If there are more, all banks risk
compliance violation.
d. The government is watching banking employees for evidence of embezzlement.
17. How did the post-2008, increased regulatory compliance requirements affect
Deutsche Bank?
a. They had to write off millions in loans.
b. They had to file for bankruptcy.
c. They were substantially fined for toxic mortgages, money laundering, and other
violations.
d. They were forced to move out of some of the countries where they were previously
located.
18. What is the problem with new policies and procedures designed to combat
corruption?
a. They are too expensive for small banks to implement.
b. They do little to quickly change the culture that facilitated the wrongdoing.
c. They are impossible to monitor in banks with more than 100 employees.
d. There is never agreement on the terminology within the policies, so confusion
ensues.
Collins, Business Ethics 3e
SAGE Publishing, 2021
19. The process of whistleblowing involves ______.
a. bank employees advertising the benefits of investing or securing accounts within their
bank
b. letting someone in a position of authority know about violations of policies and
procedures
c. providing a positive work environment where all employees do their best to get along
d. reporting bank employees who do not have their own accounts at the bank of their
employment
20. Effective cultural change within an organizational environment ______.
a. should be instantaneous if the right people are in charge
b. usually transpires within about 4–6 weeks
c. takes about 4–6 months to come about
d. may take years to be fully realized
True/False
1. The election of U.S. President Donald Trump caused ethical issues for Deutsche
Bank.
2. Deutsche Bank has turned a profit for the majority of the years since 2015.
Collins, Business Ethics 3e
SAGE Publishing, 2021
3. Deutsche Bank’s poor lending practices have resulted in customers losing their
homes.
4. Banks can manipulate LIBOR via fraudulent reporting practices in order to maximize
profit.
5. Part of Deutsche Bank’s restructuring efforts involved hiring thousands more
employees.
Essay
1. List and describe three ways in which Deutsche Bank fostered a culture of corruption
within their organization. If you were in charge of Deutsche Bank, how would you
overcome each factor?
Collins, Business Ethics 3e
SAGE Publishing, 2021
2. List and describe the stakeholders Deutsche Bank was accountable toward as of the
writing of its 2019 Human Resources Report. Why is it important for a bank to be
accountable to all of these stakeholders simultaneously?
3. Explain Deutsche Bank’s Know Your Customer (KYC) program. Why did the bank
recently implement this program? What benefits does knowing the customers more fully
offer a bank?
Collins, Business Ethics 3e
SAGE Publishing, 2021
4. Imagine you were running a bank similar to Deutsche Bank. Describe how you could
use the practical methods outlined in the case study to enhance your employees’
compliance with policies and procedures.
5. Describe the five cultural practices that were changed at Aetna as they sought to
change their image within the public eye in 2001. Outline how these strategies could
apply to Deutsche Bank.
Collins, Business Ethics 3e
SAGE Publishing, 2021