Playing it too safe at Dresdner K

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Dresdner Kleinwort's risk aversion is in danger of becoming a turn-off.

Last week eFinancialNews reported that operating profits at the bank fell 14% in the second quarter as tighter risk controls impacted trading revenues.

The move appears to have been intentional - the site quotes Helmet Perlet, chief financial officer at Allianz, who said revenues had fallen following the introduction of a deliberately conservative risk policy.

But while Dresdner may have been spared the worst of the sub-prime fallout, headhunters say its risk aversion isn't playing well with its salespeople and traders. "Last month I interviewed a sales guy who wanted out," says one, "It seems their appetite for risk has fallen so low it was curtailing his ability to do his job."

Risk aversion at Dresdner is nothing new - the bank tightened its controls after losing money in 2005 and, under owner Allianz, has made much of its cautiousness. One former insider says the bank's selling point to potential employees is the ability to make small amounts of money consistently - rather than one big amount all at once.

However, he admits the risk-averse policy is unlikely to play well with the bank's salespeople and traders: "If traders are having problems trading because of stricter limits, they will miss the flow of business, which will in turn make it harder for salespeople to get prices. The amount of money both can make will be restricted as a result."

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