This follows the announcement of plans to acquire Luthy Baillie Dowsett Pethick, a London-based research advice and broking boutique which employs 18 people.
The firm, led by Peter Luthy and Jan Pethick, will be integrated with the Kleinwort fixed income business and will take world-wide responsibility for trading and issuing Eurobonds in the Dresdner group.
Gerhard Abel and Klaus Roehricht, the current heads of Dresdner's Eurobond trading, will report to London from Frankfurt.
There have been rumours in Frankfurt that Dresdner also plans to shift its foreign exchange business to London, but this has not been confirmed.
Mr Luthy will join the management committee of Kleinwort's global markets division. Responsibility for domestic issues and government bonds will remain in Frankfurt.
Leonhard Fischer, joint head of Dresdner's Global Markets Division, said: "There will be no physical movement of business from Frankfurt."
The takeovers of Kleinwort by Dresdner and Morgan Grenfell by Deutsche Bank have upset Frankfurt's financial establishment. Both have made clear that London is their main investment banking centre .
Other moves by German banks include the acquisition by Westdeutsche Landesbank Girozentrale earlier this year of Panmure Gordon, the British stockbroker.
Mr Fischer, who shares responsibility for Dresdner's global bond business, said the new acquisition was a perfect complement for Kleinwort Benson's international strategy.
Dresdner planned in particular to expand its business with corporate clients and banks and was most interested in LBDP's existing contacts and its credit-spread business.
Initially, Dresdner will focus on German mark eurobonds and sterling, moving on to French franc products and non-European currencies afterwards.
"This is a perfectly logical fill-in for Dresdner's investment banking business," said John Leonard, an analyst at Salomon Brothers. London was a logical choice as a focus for Eurobonds, because it had a more vibrant market.
Mr Luthy previously worked with Hans-Georg Hoffman, a Dresdner board member, at Lehman Brothers, and some dealers said the move may have been tied to their working relationship.
"Kleinwort is a very conservative player in the market so Luthy Bailly will take them into areas they have not got the expertise to cover," a Eurobond analyst said.