“What the Hell Are We Doing Lending Money to a Guy Like This?”

Name a banking scandal and Deutsche Bank was in the middle of it, writes David Enrich in his new book, Deutsche Bank, Donald Trump, and an Epic Trail of Destruction.


Each era seems to have a bank emblematic of its excesses — in the 1980s, it was Drexel Burnham Lambert, the junk bond king; in the 2000s, it was Lehman Brothers.

The 2010s were different. No towering financial collapse marred the landscape; no Madoff or Enron blighted the business page. Yet never have good times felt so bad. In these early months of the next decade, America is prosperous but malcontent, solvent but anxious.

David Enrich, a former reporter with The Wall Street Journal and now the finance editor of The New York Times, has found, perhaps, the perfect vehicle for this murky, un-transparent moment. Name a banking scandal and Deutsche Bank was in the thick of it — interest rate manipulation, Russian money laundering, currency dealings with rogue states, the collapse of Italy’s (and the world’s) oldest bank, hidden derivative losses, a high-level suicide.

It would have been perfect had Deutsche bankrolled a shunned real estate mogul and made him king — and of course, they did that too, the one bank that lent to Donald Trump long after he had a reputation for stiffing its peers and for stiffing Deutsche itself.

No single thread connects these myriad scandals, but “Dark Towers” offers a compelling, if familiar, thesis: that unchecked ambition twisted a pillar of German finance into a reckless casino and fostered a culture in which amorality and, ultimately, criminality thrived.

Deutsche is intriguing not only because its leaders chased growth at any cost — resulting in mountains of losses, as it always does — but because it once was the emblem of European institutional lending, the near-opposite of Wall Street short-termism. Founded in Berlin in 1870, just before German unification, Deutsche saw its mission as advancing not just profits but German commerce in Europe and America. And over the next century — save for a nasty lapse under the Nazis, when it pressured corporate clients to rid themselves of Jewish directors — Deutsche did that well. As late as the 1980s, when Wall Street was preaching the glories of debt, Deutsche stood for stability, social as well as financial. It had no C.E.O. excesses because it had no C.E.O. It was run, consensually, by a vorstand (board), an arrangement designed to promote harmony with labor unions and industrial partners.

However, as the West deregulated markets, profits from trading soared. Wanting in on the game in 1995, Deutsche recruited Edson Mitchell from Merrill Lynch to expand its markets desk. Mitchell was a gunslinger who would wager $10,000 on a golf putt — arguably, not much riskier than the derivatives Merrill peddled to clients. Merrill was so good at peddling these unprotected market bets that one high-profile institutional client, Orange County, Calif., purchased enough to wind up in bankruptcy.

Seeking just this sort of expertise at Deutsche, Mitchell went on a hiring binge, snagging 2,500 traders and such from his former firm and others, which Enrich calls “one of the greatest migrations in Wall Street history”

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