American investment banks such as Goldman have an all-too-convincing sales pitch that has been squeezing them through once tightly closed German boardrooms doors. The message is simple: we can offer access to the biggest capital market in the world.
This is at a time when large German companies are energetically widening their sources of finance.
Faced with this competition, it is obvious that Deutsche does not have a big enough showing in the international securities markets. It is thinking about how to respond. But where should it make its move?
Frankfurt would not offer enough of an international dimension. London could, though it is hard to find any businesses available to buy that would offer the right clout on the equities side.
Building an equities business from scratch, perhaps through the Morgan Grenfell subsidiary, would take too long. Morgan Grenfell, successful though it is, pulled out of equities a few years ago and it would be a long haul back.
There have been rumours of talks with Shearsons in New York, denied by Deutsche. But the betting in Frankfurt is that at some stage Deutsche will grasp the bull by the horns and buy something big in New York.Reuse content