Deutsche Bank Worries about Regulatory Balkanization, Says Co-CEO

Deutsche Bank co-CEO Anshu Jain is cautiously optimistic about the health of the global economy but worries about regulatory "balkanization."

"At some point the (Fed's) bond-buying program will come to an end and when it does it will have an impact on the overall term structure of interest rates," he told CNBC's "Closing Bell" on Tuesday, noting that the normalization of bond yields that's been occurring over the past month has been constructive.

Jain added that while markets are worried about the Fed and the potential effects as it ends quantitative easing, investors are moderately sanguine about the global economy.

"It's a note of cautious optimism in stark contrast to this time last year," Jain said, noting that last year's worries of a potential European default, a U.S. double dip, and a China hard landing have receded.

Deutsche Bank expects higher growth for the U.S. economy than many of its peers and thus sees an end to the Fed's bond-buying program as early as the end of the year or at the latest during the first quarter of 2014.

Turning to global bank regulations, the Deutsche Bank executive said that he's "more worried about the balkanization of regulation than the quantum of regulation."

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"There's no doubt virtually every aspect of our business model -- our capital ratios, our business practices -- are being scrutinized and are the subject of regulation," Jain said.

He told CNBC that the industry needs regulatory reform, but it should be cohesive and well balanced and there should be a global standard. Jain said Basel 3 goes a long way toward doing that.

Deutsche Bank also said it will start to consider returning more cash to shareholders, something investors have been calling for from banks, when it reaches its targeted capital levels.