This week in our masters in Business interview, we speak to David Rich, the financing of editing the New York Times. He is the author of the Spider Network about the LIBOR manipulation scandal, his new book is”the Dark Tower: Deutsche Bank, Donald Trump and the epic trail of destruction.”
Rich discussed how Deutsche Bank has changed from a sleepy, provincial Bank focuses on providing local German company into a global Juggernaut. Their early supporters, the use of derivatives to hedge the position, and began to transmute into a more Wall Street investment banks. A”blinder, short-term focus of decision-making”process leads to both the rise and subsequent fall.
Deutsche Bank spent $ 10 billion, the purchase of a Bank trust, in the late 1990s, and led to a complete change in banking culture. He explained how the”Great Migration”of the 1000 trading business companies like Merrill Lynch and Swiss Bank, and Germany completely changed the nature of the company’s revenue and power structure. Even in the Bank’s official language changed from German to English.
Focus on return on equity resulting in a change in the customer and risk profile. The Bank’s Internal Oversight and regulatory bodies in the United States and Germany-failed to adequately stay on top of the enormous growth of assets and risk of the Bank. Even worse is a terrible patchwork of a consistent computer system cannot keep track of all the Bank’s positions. This leads to an inability of the Bank to monitor in real-time(or even quarterly)its own risk.
Perhaps the most shocking is how Deutsche Bank became the king of the only Bank in the year 2000. After the ACE of the defaulted loan, for Chicago skyscraper, he got banned from the sector(construction loan), he somehow managed to become one of the customers of different sectors(private banking).
A long list of his favorite books are in here’s the recording of our conversation is available here Monday.
You can stream and download our full conversation, including broadcast facilities, on iTunes, Music, female, Google, Bloomberg and the seam. All our earlier podcasts on your favorite pod main can be found here.
Be sure to check out our masters in business next week with Simon South Australia Harriet,Co-CIO at Harding Loevner, which manages about$70 billion dollars. South Australia Harriet is also all of the people of Plymouth football club League one of the teams in the city of Plymouth, Devon, England.