Deutsche boss lauds banking in City

Rolf Breuer, soon to become chairman of Deutsche Bank, yesterday advised all banks to run at least part of their capital markets operations from London because of the talents of the work force in the City.

London had an unbeatable advantage over Frankfurt as Europe's top financial centre. "London will retain its full strength as a financial centre after EMU, of that I am convinced," he said. Mr Breuer runs Deutsche Bank's global investment banking operations, which have been operated out of London since last year when the German banking giant took the usual step of taking control of the business away from Frankfurt.

Deutsche Bank, which owns Deutsche Morgan Grenfell, is now spending millions of pounds in London building a new City headquarters. Other foreign banks, including the Dutch ABN Amro, have also based their investment banking activities in London.

Mr Breuer acknowledged that London could benefit from remaining outside the single currency if the Bundesbank insisted on the European Central Bank maintaining minimum reserve requirements.

"But I am confident it will not come to that," he said. Mr Breuer, who yesterday launched an initiative to help Germany improve its position as a financial centre ahead of 1999 when the single currency is due to be introduced, said Frankfurt's reputation did not do it credit.

"Our aim is to have Germany join the premier league of financial centres world-wide." German markets were not lax on insider dealing or illiquid.