View from City Road: Question mark over Morgan link (CORRECTED)

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The Independent Online

London may well have seen off Frankfurt in the battle of the financial centres, but has Morgan Grenfell been forced to surrender its treasured independence to Deutsche Bank in the process?

Not according to John Craven, who has steered the bank from the horrors of Blue Arrow into the safe arms of Deutsche while successfully keeping the Germans at arm's length. Undeniably he has succeeded in building a highly effective working relationship between the Germans and Morgan since the bank was acquired in 1990.

On the surface this looks set to continue. All parts of the merged investment bank apart from the German operations will report to Michael Dobson, Morgan's chief executive in London. A new pan-European equities business will be built here, based on Morgan and Deutsche's non- German equities businesses and under Deutsche's guidance, and all the disparate equities arms around the world will come under this umbrella.

Yet doubts remain over Morgan's position. While Morgan employs 2,600 people in about 30 countries, Deutsche Investment Bank alone has 3,600 in more than 60. And the combined bank's board will be chaired by Dr Renaldo Schmitz along with other Deutsche heavyweights such as Dr Rolf Breur and Dr Ulrich Carterielli.

Would it really matter if the famed Morgan independence was lost? Only if its entrepreneurial culture was swamped. A key reason Deutsche plumped for London was the lack of an incentive culture in Frankfurt. So Deutsche is planning an extensive recruitment drive in London - with 'major bonuses' on offer for staff. It would be counter-productive indeed if, having been attracted to London by the red-blooded vitality of Morgan, Deutsche's innate conservatism were to dilute the combined enterprise.


Morgan Grenfell

In an article on Saturday 29 October we mistakenly referred to Morgan Grenfell being involved in the Blue Arrow affair. The bank had no involvement in Blue Arrow.