"We saw something coming so we reduced our exposure away from expanding further, stabilised it and then reduced it," Mr Breuer said, speaking at the World Economic Forum in Davos last week. "But we misjudged the character of the crisis that then evolved. It's a criticism that we have raised ourselves within the risk management side of the business."
Last month Deutsche announced that its 1997 operating profit will be down 33 per cent, primarily as a result of a provision of Dm1.4bn (pounds 467m) for unsafe loans in Asia.
The bank is expected to report consolidated net income for last year of around Dm1bn, down from Dm2.2bn in 1996. Last month Fitch IBCA, the international rating agency, downgraded Deutsche's long-term rating from AAA to AA. The bank is reported to be close to cutting 10 per cent of its 76,000 positions around the world.
Mr Breuer is attempting to regain the initiative in the region by bargain hunting. "We are interested in asset management all over the world," he said. "So we are very clearly observing what happens in Asia. Many institutions which were very expensive are now on offer at very interesting prices."
Meanwhile, he voiced doubts about the introduction of a single currency in the EU next year. "I am concerned about the lack of preparation," he said, "not with the multinational corporations, but with the middle market - the backbone of many EU countries. They still perceive the single currency as a matter of changing the book-keeping from one currency into the next."
Mr Breuer believes the Asian crisis will increase competition for European companies. He said that the euro, if introduced smoothly, could help reduce costs and increase inter-continental trade in the face of cheap export flows from Asia.
He added that Deutsche remains committed to Asia. "We're not pulling our banking activities out of the Asia Pacific area," he said. "That is not smart."
q Nigel Roberts presents 'Europe Tonight' for CNBC and NBC in Europe.Reuse content