WW2 and the subsequent division of Germany into two parts saw the beginning of a new era. Dollar replaced Pound as the world's reserve currency, the Cold War began and Bretton Woods system cam into being. West Germany was right at the frontier of the Cold War. Formation of NATO, fear of Communism and the 1957 Treaty of Rome let to stronger cohesion in the Western powers. Overall, the German economy in particular and Western economy in general did pretty well. Despite the protectionist and nationalist passion carried over by the previous era, the period after WW2 saw denationalization of finance. This was a direct result of free-convertibility of currencies and the ease with which money could move from one country to the other. If anything, the advent of information technology made the process faster and more difficult to control.
Under the able leadership of Abs, the Deutsche Bank managed to go through this turbulent period rather effectively. It was able to avoid American pressure to break itself and hold on to its structure of a "one-stop" bank. This brings out a very fundamental difference in American and German attitude towards finance in general and banking in particular. While Americans hated seeing too much power being concentrated in the hands of any one institution, Germans encouraged such institutions as symbols of stability and national pride. The specialized US Investment Banks, though, gave Deutsche Bank some serious competition and were more effective due to their focused agenda. Duetsche bank found it a little hard to adapt from a banking based on relations to a banking based on commoditized services and transaction carried over impersonal capital markets. As far as from 1870, boom and bust cycles have been a hallmark of capitalistic systems. Cartelization and groups of interest were especially strong in the German business to counter the effects of such cycles and deal with the effects of destructive competition. It seems the influence of this thinking lasted well after WW2. A strong nationalistic influence also made it a little difficult for Deutsche bank to adapt rapidly to other cultures. Lack of enough good management talent and shoddy acquisitions continued to haunt the bank as far as 1990. The two world wars, the division of Germany and subsequent reunification had a cumulative effect of not only hurting the bank's bottom line but also making it a bit cautious about international investments. Nevertheless, by 2000 with its acquisition of the Banker's Trust the bank had displayed some significant improvements, becoming a world leader in the business of global currencies, commodities trading and credit derivatives trading. Additionally, it is very clear that the American operations had a very strong influence on the bank in terms of revenues, management and getting a stronger footprint in investment banking.
Concluding, the story of Deutsche Bank is indeed the story of evolution of finance. The book gives a good insight into the working of the financial world besides bringing out the importance of political factors and international co-operation for the profitability of a business. The way Deutsche Bank grappled with changing international scenarios, different cultures and lack of management talent is particularly instructive for any company or individual who wishes to operate internationally. Finally, the way the Bank has survived in face of seemingly impossible obstacles is inspiring. A good book overall.
Under the able leadership of Abs, the Deutsche Bank managed to go through this turbulent period rather effectively. It was able to avoid American pressure to break itself and hold on to its structure of a "one-stop" bank. This brings out a very fundamental difference in American and German attitude towards finance in general and banking in particular. While Americans hated seeing too much power being concentrated in the hands of any one institution, Germans encouraged such institutions as symbols of stability and national pride. The specialized US Investment Banks, though, gave Deutsche Bank some serious competition and were more effective due to their focused agenda. Duetsche bank found it a little hard to adapt from a banking based on relations to a banking based on commoditized services and transaction carried over impersonal capital markets. As far as from 1870, boom and bust cycles have been a hallmark of capitalistic systems. Cartelization and groups of interest were especially strong in the German business to counter the effects of such cycles and deal with the effects of destructive competition. It seems the influence of this thinking lasted well after WW2. A strong nationalistic influence also made it a little difficult for Deutsche bank to adapt rapidly to other cultures. Lack of enough good management talent and shoddy acquisitions continued to haunt the bank as far as 1990. The two world wars, the division of Germany and subsequent reunification had a cumulative effect of not only hurting the bank's bottom line but also making it a bit cautious about international investments. Nevertheless, by 2000 with its acquisition of the Banker's Trust the bank had displayed some significant improvements, becoming a world leader in the business of global currencies, commodities trading and credit derivatives trading. Additionally, it is very clear that the American operations had a very strong influence on the bank in terms of revenues, management and getting a stronger footprint in investment banking.
Concluding, the story of Deutsche Bank is indeed the story of evolution of finance. The book gives a good insight into the working of the financial world besides bringing out the importance of political factors and international co-operation for the profitability of a business. The way Deutsche Bank grappled with changing international scenarios, different cultures and lack of management talent is particularly instructive for any company or individual who wishes to operate internationally. Finally, the way the Bank has survived in face of seemingly impossible obstacles is inspiring. A good book overall.
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