Nein, Nein: Heart of the bank that likes to say no: After a week when the Bundesbank stood firm against a sharp fall in interest rates, John Eisenhammer has a rare tour of its corridors of power

IT MAY have been built in the Sixties, but there is nothing very swinging about the Bundesbank's headquarters on the outskirts of Frankfurt.

An enormous grey concrete slab lying on its side, it looks like a barrier of last resort, should the Taunus hills to the north one day threaten to slide down and engulf the city.

It is more probable, however, that the architects Apel, Bechert and Becker were asked to create an edifice that conveyed a sense of stability. In this they succeeded, capturing with their monolith the extraordinary symbolic importance of the Bundesbank for the ordinary German.

As the President of the European Commission, Jacques Delors, remarked: 'Not every German believes in God, but they all believe in the Bundesbank.'

By itself, the statutory guarantee of the Bundesbank's independence would probably not have been sufficient to achieve the stature and reputation it enjoys.

Equally important is the fact that it has operated in an anti-inflationary culture the like of which hardly exists elsewhere. The traumas of having savings wiped out twice this century by hyperinflation - once during the Twenties and again just after the Second World War - are seared on the collective memory of Germans. The Bundesbank has both nurtured and fed off this popular obsession with secure money.

Germans do not like hardship any more than other people, but they appear to be prepared to put up with a great deal in defence of the mark. For it has become the only real symbol of national pride for a nation that has lost most of its historical icons.

The overwhelming fear provoked among Germans by the prospect of giving up the mark for a common European currency indicates a powerful vote of confidence in the men in suits who stalk the long, spare corridors of Apel, Bechert and Becker's monolith.

On a sharp autumn day, the building, set in an attractive park complete with a little lake, looks almost friendly. In bright sunlight, masses of pink heather glow beside the stone-paved road that leads from the fore- gate, guarded by paramilitary police toting sub-machine-guns, up to the front door.

There are no Bank of England-style footmen in fancy dress here, just porters in sober blue suits, who accompany you to and from the offices on the 13 floors. Even the comparatively luxurious 12th floor, where the Bundesbank's president, Helmut Schlesinger, and the other permanent members of the central council have offices, is fairly sparse.

White marble-clad walls seem to stretch to infinity down a single, narrow corridor. Off it are the council members' offices, where the furniture tends to be modern and discreet, more halogen lamp than chandelier.

What one imagines as the Bundesbank in Frankfurt is in fact the centre of a tentacular, nationwide operation employing 18,000. In addition to the headquarters, there are the 11 central banks of the states or Lander of former West Germany, to be reorganised next month into nine banks covering all 16 states of united Germany.

With all the apparent attributes of a mini-Bundesbank, a Landeszentralbank is, in fact, not independent at all, but a grandly named state branch of the Frankfurt HQ. The heads of the state banks, particularly those of powerful states such as Bavaria or Baden-Wurttemberg, enjoy considerable influence, however, through their position on the Bundesbank central council, which decides national and, indeed, international interest rate policy at its fortnightly Thursday meeting.

As well as the state central banks, there are around 200 regional branches in the main towns and cities. For the Bundesbank is not just a central bank in the narrow sense, but an active business, accounting for more than 30 per cent of Germany's payments transactions, with its own clearing-houses. The 900 senior-grade officials of the Bundesbank are spread more or less evenly between these three main sectors: a third in Frankfurt, a third at the state central banks, and the rest heading the regional branches.

All have survived a training that best explains why the term 'obsessive' is often pinned on the Bundesbank by outsiders.

The Frankfurt central bank spares no effort in its painstaking, methodical honing and crafting of 'Bundesbank Man'. 'People who do not regard inflation as the greatest evil are an exotic species here; they do not last long,' the head of the bank's personnel department, Thomas Buch, remarks drily.

It appears, however, that the Bank's uncompromising reputation has gone well before it. For as Mr Buch notes, most of the 30 young people taken on each year as aspiring mandarins cite, as their main reason for choosing the Bundsbank, a desire to 'get their hands on the discount screw'.

Patience is required, however, before reaching the young Bundesbanker's nirvana. Having an MA with distinction in economics is not enough: you are also required to have had two years' business experience, usually as an apprentice before university, in industry or banking. Only then does the Bundesbank start to inculcate in you the 'goals and values of the Bank, at the heart of which stands the idea of stability', Mr Buch intones, as if reading the lesson.

The aspiring mandarins embark on a two- year training course, in which they cover virtually all aspects of Bundesbank operations. At the end, they sit exams, the results of which are crucial to their subsequent careers. Even then they are not regarded as fully formed disciples of monetary rigour by the prudent guardians of the Bundesbank faith.

The 'trainees', by now well into their early thirties, still have to complete a nine- month practical course in one of the regional branches. Only then may they declare themselves to be bona fide Bundesbankers. The Bank takes the opposite view to the Bank of England, where the intelligent generalist is encouraged to acquire specialist knowledge on the job.

In Frankfurt, the emphasis is on forging the specialised generalist, enabling future mandarins to operate in all of the main departments of the Bank, and above all, steeping them in the stability ethos.

The same rigorous training idea applies further down the hierarchy. Most middle- management officials do not go on to external further education, but apply directly from school to the Bundesbank, where they then do a three-year training course.

Having invested so much in creating the next generation of Bundesbank Men, the central bank manages to hold on to most of them, despite the enticements of higher salaries in the commercial sector.

Just 2 per cent of senior-grade officials leave each year for outside jobs. In an effort to render itself more attractive, the Bundesbank offers a 22 per cent top-up on the nationally set civil service rates. An aspiring mandarin, newly trained, starts on about DM5,500 ( pounds 2,245)a month; a head of department makes around DM13,000, a member of the central council DM27,000. The vice- president, Hans Tietmeyer, is reported to be on DM37,000, with his boss, Helmut Schlesinger, earning DM50,000.

By comparison, a member of the board of a big German commercial bank would feel hard done by if offered less than DM70,000 a month. For a country as obsessed with its elites as is Britain, it is hard to accept that such questions are meaningless at the Bundesbank, or in any top German institution.

After the war, West Germany went out of its way to fashion a society which was not shaped by and around those elites which, twice in the past, had played a leading role in plunging the nation into disaster. The result is that western Germany today continues to be one of the most self-consciously democratic and meritocratic societies in Europe.

There is no equivalent to the British public schools or the top Paris lycees, or Oxbridge and the Grandes Ecoles, to link the aspiring mandarins before they get to Frankfurt. Once they arrive, the Bundesbank forges them into its own elite.

But even rampant meritocracy has its limits. It is some years since the silver- haired Mr Schlesinger has been seen manoeuvring an orange plastic tray among the formica tables in the staff canteen. It is in the basement, at the heart of the place traditionally called Diebsgrund, which could be translated as thieves' lair. This may explain why one cannot pay with cash in the canteen, but only with in-house credit cards. The Bundesbank public relations people prefer the explanation that Diebsgrund stems from some old Allemanic term meaning deep.

Mr Schlesinger has forsaken the depths for the refined air of the 13th floor, where he usually lunches with other members of the council. It is to be hoped that they like Sixties decor, for the main executive dining-room is decked out in waves of orange and ochre, dotted with what looks like a series of flying saucers. It is here on the top floor that most of the Bundesbank's art collection has its home.

As befitting an institution 'without a past', there are no old masters here. It is a cross-section of contemporary German art, purchased at the rate of one or two paintings a year, and including works by Dix, Nolde, Baumeister and Immendorff.

The inner sanctum, the large 13th-floor room in which the central council meets fortnightly, is adorned at each end by two massive Max Ernst tapestries. Around the oval table, the top men of the Bundesbank, 18 in all, are seated according to length of service on the council. The oldest are nearest the president, with the newest member of the inner elite facing them at the far end of the table.

Superficially, this central council appears a glaring anomaly for an institution so obsessed with shaping its decision-makers in its own image. For the majority of those on the council are heads of the state central banks, not Bundesbank Men at all.

At present they number 11, against 7 permanent directors. After the November reform, the numbers will be 9 and 7. These state central bank heads are political appointees, in office for eight years. They include a former mayor of Saarbrucken. It is hardly surprising some may appear a little glazed during the more intricate passages of a Schlesinger argument on money supply targets.

But what these outsiders have not done, as the Bank's experience shows, is weaken the stability ethos. Despite their numbers, they are outweighed by the de facto authority of the permanent members, particularly that of the president. Furthermore, they are rapidly assimilated into the anti-inflationary culture, whatever their political origins.

Each state bank head is surrounded by a staff of fully indoctrinated Bundesbank Men. Social Democrat politicians elected to the council, such as the former Hamburg state bank head, Hans Hermsdorf, acquired a reputation for toughness to match that of their conservative colleagues. On the Bundesbank central council, the hard men differ only by degree. No other breed survives.

(Photographs omitted)