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Deutsche Bank

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Brandon Edwards

on 3 November 2015

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Transcript of Deutsche Bank

Statue in front of the former headquarters in Frankfurt
1. How would you describe the bank’s corporate culture? Was it evident on both the commercial and investment side of the business? Did it change significantly over time?

2. How did the bank operate as a political actor? Did the bank seriously compromise its independence through negotiations with state actors?

3. In what ways was the bank influential in shaping the larger industrial economy in which it operated?

4. Why was the bank decentralized and then re centralized during the Occupation?

5. What does the Deutsche Bank case reveal about the nature of modern German capitalism?
Case Analysis Questions
First head office in Berlin
1870: Deutsche Bank, founded in Berlin, obtains banking licence from Prussian king.
1871: Nation of Germany established
1873 financial collapse

1888-1903: Deutsche Bank participates in funding the construction of the Baghdad Railway.
1914- 1918: World War I
1923: Peak of Post- War (Hyper)Inflation in Germany
1929: Major Merger with Disconto-Gesellschaft
1929: Start of Great Depression
1933: Hitler's seizure of power in 1933
1938: Aryanisations' reach their peak – Deutsche Bank has been involved in 363 of them
Deutsche Bank Historical Timeline
Georg Siemens
1b. Was it evident on both the commercial and investment side of the business?
Indirectly the bank stimulated the German economy through another facet of cooperative capitalism.
Deutsche Bank played a major role in the development of many of Germany’s largest industrial firms.
1c. Did it change significantly over time? How?
Yes

Discussion Time
Magazine about Deutsche Bank
1939-1945: World War II
1945: Reconstruction Begins
1947-1948: Deutsche Bank decentralized (broken up into ten banks) by the Allied Forces
1953: Ten decentralized banks, recentralized into three
1970's : Deutsche Bank grows into an international power.
1989: Assassination of Herrhausen, Chairman of Deutsche Bank
Deutsche Bank Historical Timeline (cont.)
Adelbert Delbrück
1a. How would you describe the bank’s corporate culture?


1b. Was it evident on both the commercial and investment side of the business?


1c. Did it change significantly over time? How?
Discussion Time
Discussion Time
First share certificate of Deutsche Bank
1a. How would you describe the bank’s corporate culture?

The Deutsche Banks corporate culture can be adequately summarized by the term “cooperative capitalism.”
German banks played a crucial role in the development of the German business system as well as some of it largest, and most notable firms.


Deutsche Bank Cologne branch in 1945
2a. How did the bank operate as a political actor?  



2b. Did the bank seriously compromise its
independence through negotiations with state actors?
Disscussion Time
Deutsche Bank
*World and German Historical Events in Red*
Major Themes

Cooperative Capitalism
International Trade Relations
Universal Banking
Commercial Banking: A financial institution that provides services, such as accepting deposits, giving business loans and auto loans, mortgage lending, and basic investment products like savings accounts and certificates of deposit.
Investment Banking: A specific division of banking related to the creation of capital for other companies.
Economic and Political Shocks
Decentralization and Recentralization
Horizontal Integration (Mergers)
2a. How did the bank operate as a political actor?
Just prior to the end of WW1, the Deutsche bank was able to pressure the German government into purchasing the majority of shares in the Baghdad Railroad Company (a $100 million investment)  
Deutsche Bank had major stakes in many of Germany’s major firms, each of which had some political sway/power
Hyperinflation after the first World War: government implemented expansionary policy
Rise of Nazi Germany
2b. Did the bank seriously compromise its
independence through negotiations with state actors?
YES!!!


Discussion Time
Discussion Time
Discussion Time
3. In what ways was the bank influential in shaping the larger industrial economy in which it operated?
The Deutsche banks close relationship with its clients, coupled with its high level of corporate governess within these firms, allowed the bank to exercise its influence in the firm’s decisions.
Universal banking: The Deutsche banks unique method of offering both commercial and investment banking allowed it to play an even larger roll in German business development. Simply by fulfilling both aspects of its duties.
As a commercial bank, it took deposits and made short term loans, and fulfilled its duties as an investment bank by managing the long term credit of its clients and underwriting stock and bond flotation’s.
Deutsche Bank largest private clients were mainly German industrial firms
Indirect economic stimulation through cooperative capitalism.
German Industrial Plant 1800's
4. Why was the bank decentralized and then recentralized during the Occupation?
Disscussion Time
4. Why was the bank decentralized and then recentralized during the Occupation?
Decentralization
After WWII the Allied Forces took over (occupied different portions of Germany).
Many bank officials were on trial for war crimes
America led the effort to decentralize Deutsche Bank.
“These proposals are an integral part of our program to ensure that the German financial hierarchy will never again play an part in disturbing world peace” (M. Doge)
Discussion Time
Recentralization
The bank was able to recentralize in two stages, to the efforts of Hermann Josef Abs
The ten were merged into three in 1952.
In 1957, the three merged back into Deutsche Bank.
Discussion Time
5. What does the Deutsche Bank case reveal about the nature of modern German capitalism?
Universal banking pioneered by the Germans, has gone on to redefine modern banking structures in firms all over the world. The Duetsche banks early forays into international investment banking laid the foundation of what would become Germanys thriving international financial sector, helping to build and solidify complex global connections.


Questions
1. What do you think the role of government in banking should be, if any?

2. In 1896, George Siemens expressed his worries about the firm's size and excessive international expansion. One century later are his worries still relevant today?

3. Has the original vision/goal of Deutsche Bank been realized? Yes or No? Explain?


Discussion Time
In what ways was the bank influential in shaping the larger industrial economy in which it operated?
By:
Patrick Zoccali
Daniel Morley
Brandon Edwards

5. What does the Deutsche Bank case reveal about the nature of modern German capitalism?
Discussion Time
Full transcript