David Enrich argues that starting in the mid-to-late 1990’s, the executives of Deutsche Bank lost sight of the long-term and “obsessively” focused on short-term profits. In 2003, the problem was exacerbated by former CEO Joe Ackermann’s push for a six-fold increase in investor return on equity – pushing the envelope from 4% to 25% returns over a very short time frame. Amazingly, Deutsche actually succeeded in that radical increase over Ackermann’s absurdly short timeline. Enrich describes how the process by which Deutsche rapidly transformed itself came at the price of the future of the bank itself. Halting investment in technology and compliance combined with the overhaul of firm-wide incentive systems both “sowed the seeds for this great catastrophic parade of financial scandals of [Deutsche Bank].”
Get 2 new episodes of The Interview
sent to your inbox every WEEK - FREE
The smartest minds in finance sit down for incredibly deep-diving discussions.