News item
25 Mar 08
Who will help Mr. Ackermann?
On the 18th March 2008 in Frankfurt, Josef Ackermann, CEO of Deutsche Bank AG, took everyone by surprise with a speech held before bankers. He asked both government and central bank for help: “We need concerted action from central banks, investors and governments to finally put an end to this melt-down of worth.” The economy minded reader will wonder just what this cry for help from Mr. Ackermann means. He himself has always been a manager vehemently dedicated to blocking any intervention made by the state, considering this to cause great harm to the market economy. In the present turbulent times of the financial markets, and the troubled situation of financial institutions, such a cry would seem like quite a helpless gesture, would it not be for the history of Deutsche Bank, and its use of PR to achieve one or two goals, to put it diplomatically. In addition Mr. Ackermann and the author both studied at the same university, not that this necessarily speaks for either of them. However, it does show that Mr. Ackermann is neither a stupid nor inexperienced person who does not know what he is doing. It can be assumed, more likely, that Deutsche Bank AG is trying to gain something from the present crisis. So far, the bank does not seem as badly hit by the credit crisis as compared to some of its competitors. From this viewpoint it would make sense to add to the anxieties and insecurities of the markets. This could cause even more detriment to the reputations of the institutions involved in the present upheaval, while being beneficial to Mr. Ackermann’s interests.
Instead of assiduously ignoring the statements of this banking director, the whole German political and central banking community has put the matter on the agenda and all are opposing the idea of state and central bank intervention. Even the big union of the service industry, Verdi, has jumped to the side of the “enemy” and is now singing the same tune. This is quite a change of role or shows how crazy the world can be. But then, just three days after this, do we learn that Deutsche Bank was amongst the bidders for the crippled investment bank Bear Stearns, and even had good chances to win after it seemed JP Morgan Chase had not been scrupulous enough in its price negotiations, giving rise to opposition in its ranks of influential shareholders. In the course of the transaction, the American Central Bank, the Fed, gave a risk protection guarantee of 30 billion USD. Even a good capitalist must be in favour of this type of state intervention. A seeker of morals should not look to the world of economists.