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Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Deutsche Bank CEO Josef Ackermann today. All references must be sourced to CNBC.


MARIA BARTIROMO : Hi there, Simon, thank you very much. And of course we are talking all day about the bailout for Greece and the ripple effects in the market. Let's talk right to Josef Ackermann, who has been a leadership voice in the Euro zone on this issue. Josef, thank you for joining us.

JOSEF ACKERMANN: A pleasure to be here.

MARIA BARTIROMO: Talk to us about the implications of this bailout.

JOSEF ACKERMANN: Well, we-- we are discussing-- the next traunch. And-- I think it's very important that we-- check the necessary funds-- to help Greece. But there are two major issues. One, of course, is that accepted within Greece, all this-- additional-- posterity program measures-- which are necessary in order to get-- the funds.

And secondly, of course, how do you explain that to your own people in different countries in Europe? And that's why a lot of people say, especially the German government, but also Dutch government, the Finnish government, are saying, "We should have some sort of private sector involvement." And that's a big question.

The European Central Bank, so far, has been opposed to that idea, because we really don't know what the unintended consequences-- of all that are. So I think-- we should-- and we are starting it, whether we can voluntarily contribute somehow in order to support-- get this-- political support. But on the other hand, I think there's no other option than doing check the necessary funds.

MARIA BARTIROMO: And of course this is a subject that actually France and Germany had disagreed on in terms of having private investors shoulder some of the burden here. What do you envision? How would you like to see private investors take on some of the debt?

JOSEF ACKERMANN: Our first approach, just in-- in this-- general French-- discussion-- they at least decided today that we should act fast. That's very important. Because some people wanted to delay it, which would, in my view, have been a disaster. And the risk of further contagion would have been increased.

Now how could it work? We have to avoid, on the penny circumstances, a credit event or a rating event. And we should, of course, also see that there is no real markdowns of positions, not so much-- or not only the banking system, but we also talking about the European Central Bank, we are talking about insurance companies, about pension funds, and of course about-- Petroleus. So it has to be absolutely voluntarily. And-- and the way to achieve that is-- not yet-- react-- no solution yet. But we are starting it, and we are certainly open to a dialogue.

MARIA BARTIROMO: Take us back and go through the severity of this problem. First of all, the banking sector. How much of an impact-- are you seeing on the banks to the exposure to Greece?

JOSEF ACKERMANN: Well, if you are exclusively talking about Greece, and-- and we can take-- absolutely certainty that there is no contagion to any other-- of the debt countries, then I think the impact will somewhat be-- small. Much of that is in the Greek bank system, which of course would have to be recapitalized. And then part of it is in the public sector banks.

The private banks, I think, could manage that pretty well. Deutsche Bank, for instance, a relatively small exposure. Having said that, the risk of what is going to happen in other markets, what is going to happen in other countries, that's an open question. And-- and no one has a clear answer. That's why I think we have to be very, very careful of how we structure such a-- going forward.

MARIA BARTIROMO: I want to talk about that, because this is, of course, what the market is focused on. First off, in terms of Deutsche Bank, what happens to Deutsche Bank, for example, if Greece does default?


MARIA BARTIROMO: What kind of an impact?

JOSEF ACKERMANN: I mean the-- the direct impact to-- depending on what-- what the final markdown will be, would be-- would be in a relatively small number. So it's-- you're not talking about big numbers. But what I cannot say, what it means for financial markets in general, and whether it would have similar-- dislocations as we had-- after Lehman collapsed. That is an unknown. And-- and then, of course-- things could get worse. But-- I think we are well positioned. So for Deutsche Bank, on a stand alone basis, I'm not overly concerned there.

MARIA BARTIROMO: Where are the other vulnerabilities? Are we talking about Portugal? Are we talking about Spain? Italy?

JOSEF ACKERMANN: No, I think we-- we really have to say one thing. It is Portugal, an Ireland right now. Although the reasons are different. I mean we have in Portugal and in Greece is more a debt problem of the-- of sovereign risk-- of the state, whereas an Ireland-- has been more a banking problem. So they had to solve the bank problem.

Actually, Ireland was a role model in terms of a very low debt to GDP in-- in sovereign risk terms. Now Spain, in my view, is absolutely safe. And we have to do everything to keep it there. Because-- of course if the wave would hit-- Spain or any other larger countries, we would talk about much bigger problems. But I'm very confident that Spain is doing the right things. They are recapitalizing their savings banks. They are having reduced the fiscal deficit.

Their debt to GDP, by the way, is not very high. It's-- they started 35 percent, which was a tremendously attractive starting point. And they will-- end up maybe with 70 to 80 percent, which is still manageable. Completely different from what you're seeing in Greece and-- and of course Portugal.

MARIA BARTIROMO: And you said we have to make sure that this is the case, protect it. How do you protect it? What kind of structure would you like to see in terms of this bailout or restructuring of debt to insure that we don't see sort of a-- catastrophic ripple effect throughout the Euro zone?

JOSEF ACKERMANN: Well, that's why we have to gain time. It is impossible, because we have created these kind of imbalances. And-- I have to be very self critical. Financial markets have not put enough discipline on Greece and other countries. I mean how was it possible to raise almost 300-- billion Euros, or even slightly more than that, at very attractive rates? Although we knew that-- Greece was, from an economic point of view, a much weaker country than, let's say, Germany or France.

So in that sense, how to move from this imbalance today to a new, sustainable, equilibrium? And I think you cannot do that overnight. We have built up this imbalance over many, many years. And it will take longer to bring it down to a sustainable level. And-- and that's why we should not only focus and reduce in fiscal deficits, we should also talk about strengthening the economy in Greece, so they, going forward, not only creating jobs, but also, having a stronger business environment in order to be able to service the debt, and export and create jobs and be a stronger economy.

MARIA BARTIROMO: I want to talk to you about the timing of this, and when, in fact, you believe we will actually see clarity on this. What is your timeframe on this?

JOSEF ACKERMANN: Well, we have to-- to have clarity-- in the coming days. There's no doubt about that. I mean-- in the coming days, you have to know whether the IMF and Europe is willing to inject more funds. And I really do hope that it's going to happen. If we delay it until September-- who knows what's going to happen over the summer break in terms of discussions around-- around other countries, as well.

But of course the longer term, the economic strength program, which, you know, I once said mi-- might be something like a Marshall Plan. That will take much longer. That's-- that's a five to ten year time horizon.

MARIA BARTIROMO: We're going To talk more about the clarity on The Closing Bell. I'm going to send it back to-- headquarters right now. Josef Ackermann, thank you very much for your insights on this important subject.


MARIA BARTIROMO: Thank you so much. Josef Ackermann joining us here at the St. Petersburg Economic Forum. Send it back to you, and we will continue talking about the timing and what's next for Germany on The Closing Bell today, later at 4:00. I'll send it back to you, Simon.


MARIA BARTIROMO: Josef, in terms of taking a leadership role, you clearly have been leading in terms of the talks in the Euro zone. Tell me what has been the biggest sticking point.

JOSEF ACKERMANN: Well, the-- most important one, and the most difficult one, is of course you have to convince people that they are willing to transfer funds to some of these countries on the periphery. And-- of course if you are hardworking and-- and-- you are losing your job, and then you are-- and you are paying high taxes, and then you're saying, "Why do I have to transfer some of my revenues, tax revenues, to other countries?" So that is a very, very complicated-- concept.

But-- I think it's important that political leaders and business leaders-- the same, parallel-- try to explain why this is important. It's not only-- the Euro-- as a currency, it's also, of course, the European idea, which is finally at stake. And-- and-- another point is that we are all beneficiaries of the euro concept.

If we had to compete with deutschemark in the-- on a global level, or if we had to compete as a individual country against China, against India, against Brazil and United States, I don't think we would have the voice we need as Europeans. And so we have to have a coordinated-- voice. And-- and-- and that necessitates some sort of-- coordination. And think we have to do more-- in terms of political and economic coordination.

That was the big problem when the euro started. You know, it was the idea of starting with a currency, which then leads to some sort of a political, or at least fiscal, union. And-- and we have done many, many things right. But we have maybe not achieved that goal fast enough.

And then, when the financial crisis came, and people started to focus and to scrutinize the levels of-- of-- the-- the competitiveness in different countries, they have realized that some have a too-high indebtedness. And I think that, then, led to this kind of dissipation.

MARIA BARTIROMO: Because of course this whole upset and debt issue for Greece, and the ripple effects throughout the Euro zone, has brought up the new skepticism about the euro. Do you believe that the policy makers will protect the euro? Or is there a chance that the euro looks much different in three research?

JOSEF ACKERMANN: No, that's absolutely clear that it is not a euro crisis, it is a debt crisis on the periphery. And the fact that-- Europe is so much part of-- or the euro is so much part of the European idea, is absolutely clear. And I would say, you know, for a while, the euro was so much weaker when the crisis started, but then has strengthened again. And since then, has actually been the relat-- relatively stable.

But you should not forget, we started against a dollar at 1.18, and then the dollar got very strong, the euro got very weak for some years. And then we came back and-- and we had a very strong euro. Now we are somewhat in the middle, but still substantially above the starting point.

MARIA BARTIROMO: Now of course Germany has been really the locomotive of the Euro zone, really the strongest region. What is behind this straight in the midst of all of this upset elsewhere?

JOSEF ACKERMANN: That's a very, very interesting question. And-- and I think you have several reasons for that. Now of course to be fair and honest, I have to say that Germany suffered very much during the financial crisis in the first year. We had a negative growth of 4.6 percent, but then recovered very quickly at over 3.5 percent, and continues to grow at a very high level.

So we are now ahead of the-- the crisis, which is very good. I think you have many reasons. One is the fact that-- German companies, very early, maybe after Second World War, started to increase the presence in emerging economies. In Latin America, in China, in India, you find-- Middle East, and Africa, you find a lot of German companies being present then for a long time.

I mean just Deutsche Bank, we are now 130 years in-- in Russia. We have 130 years in-- Argentina next year, 125 years, and over 100 years in-- in brazil, which-- which is an interesting phenomenon, actually, that European companies have started much earlier to reach out to emerging markets, now benefiting from it. Secondly, I think the proximity to Eastern Europe helps.

Thirdly, the-- we kept investments in R and D during the crisis. Fourth, and that's maybe an advantage of co-determination, that we kept the people-- we trained them, so we could reactivating after the crisis. So we didn't have to hire and fire people.

And I would say what has been done in terms of social systems, tax system and so on, has been-- very important. The changes which have happened over the last ten years. And the last point, which is-- a little bit a controversial one, but you know we were allowed to sell our industrial holdings tax free. And I think that opened up German companies to the corporate-- controls, or the-- control and discipline which is set by financial markets. And that changed the management and changed the focus of many of these companies. And that was a fantastic thing in hindsight.

MARIA BARTIROMO: Let me talk to you a bit about monetary policy and the job Ben Bernanke has been doing. Many people in the emerging markets will say all of this free money has created an inflation problem. What is your take on the Fed's policy in the United States, the impact on your business? And what happens when the QE2 program goes away?

JOSEF ACKERMANN: Well-- let me start with the last point. I mean there is a lot of uncertainness about all exit strategies. The fiscal exit strategies, be it monetary exit strategy, that's a very big thing which no one, I think, has a clear answer. In terms of-- the monetary policy of the Fed, and in-- particular-- specifically about the , I'm a strong supporter of that.

I know that some of the money has-- gone to strong, maybe less open, economies. And that's-- appreciated let your-- appreciation of the countries. And of course we have also seen that it added, to some extent, some inflationary pressure in certain regions.

But, you know-- knowing how important the U.S. market is, I think to keep the U.S. economy strong and alive, and-- and-- and we have a lot of chance in the United States, was much more important for the global economy than this ripple effect is discussing. So I'm a strong supporter.

MARIA BARTIROMO: And-- and-- and what is your take in-- in terms of-- what happens in the coming-- I mean I know you don't like to think short term. But I mean here we have a new regulatory environment. We've got Basel Three rules coming on. What's your take on how the regulatory environment has changed? How does that impact Deutsche Bank?

JOSEF ACKERMANN: Well, I'm-- I'm very much in agreement with what we have seen so far. The-- the capital requirements, liquidity requirements. I think we should stop now, and we should take stock before we move on with the next steps. Now I know there's already the discussion going on.

The problem is several fold. One is-- the financial markets are less patient than regulators. Regulators are giving us time to phase it in. But financial markets actually would like to see it implemented almost today. The second one is, with all this new demand for capital, long term funding, where does the supply come from? If you talk to the insurance companies, they are saying, "We already full with bank risk, so why should we-- be willing and capable of injecting even more funds into the banking system?" And the same you will hear from any others, especially given the low valuation of many bank stocks-- in the industrialized world.

And thirdly, I think we have the risk of some going-- further than what was agreed-- in general, which leads somewhat to a race to the top, and of course creates a playing field which is no longer leveled. And I think that is-- something which is very negative.

We have a global production system in the world. We have a global trading system. And I'm a strong believer that we also need a global financial system. And if we have a fragmented financial system, we pay a price for that. And the last point is, with all these measures, we have got levees, more capital, more liquidity-- resolution funds, and many other things-- winding down, or-- or facets-- no one fully understands the cumulative impact of all of that on the world economy.

And in such a fragile environment as we have now, with imbalance in the United States, with the debt crisis in Europe, with the political tensions in Northern Africa and Middle East, and of course is part of inflation in China, I think we have to be very mindful of what that could lead to in terms of our most noble tasks when we finance the economy.

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