Morning Coffee: Pity John Cryan as he tries puncturing Deutsche's arrogance. Weird area on Goldman's trading floor
It was always clear that Deutsche Bank CEO John Cryan was up against it. When Handelsblatt journalists shadowed Cryan last year, they depicted a man trying to turn an oil tanker. Renowned for his asceticism, Cryan himself was traveling cheap and working hard, but Gunit Chadha, the chief executive of Deutsche Bank’s Asia Pacific operation, automatically arranged to meet Cryan in a restaurant beside a “spectacular swimming pool". "Why couldn't we meet in the office?" Cryan reportedly queried.
Spiegel's new history of Deutsche's investment bank helps explain why Chadha chose the pool venue. It also explains why Cryan seems the right man to turn Deutsche back into a place where meetings take place in unexciting side rooms.
Deutsche's investment bank was built on a sense of aggressive exceptionalism, suggests Spiegel: it's in its DNA. When Deutsche decided to move into investment banking in 1995, it hired Edson Mitchell to lead the charge. Mitchell seems to have suffered from short man syndrome: he was "aggressive in a positive way", incredibly competitive, and had been denied promotion at Merrill Lynch because of his abrasive style. At Deutsche, he was nonetheless paid a fortune and given a free rein to hire whomever he liked while making statements such as, "If you don't have $100 million by the time you're 40, you're a failure," and, "I am God" (when asked who he was by a colleague in Frankfurt).
Mitchell's untimely death in a plane crash in 2000 helped quell posthumous criticism of his management style, but Spiegel traces the culture that was Deutsche's undoing to Mitchell's door. It was Mitchell who hired Anshu Jain, Cryan's predecessor as CEO (Jain had a portrait of Mitchell in his office and said he would have, "gone to the ends of the earth" for his deceased ex-boss), and it was Jain who presided over a catalog of errors in the investment bank.
By comparison, Cryan - with his battered briefcase, dour manner and disinterest in all fripperies, seems a throwback to Deutsche's pre-Edson Mitchell days when modesty prevailed and money was far from everything. If Cryan succeeds, he could find himself at Deutsche for a long time yet - before the German bank embarked upon its investment banking experiment, it had the same CEO (a "discrete, courtly gentleman") for 39 years.
Separately, fear not if you see a putting green in the corner of Goldman Sachs' trading floor. The Wall Street Journal reports that this is simply a signifier of Goldman's 'tech ideas area'. It is here, for example, that the bank cooked up the idea of ' Simon' - some popular new software that connects buyers and sellers of structured products directly. In this area are also "glass walls that double as whiteboards" - because for some reason banks always seem to think that letting people draw on stuff is a retention tool.
Since launching Simon in 2013, Goldman has jumped to No. 1 in structured note issuance from No. 4. (Fortune)
Rurik Jutting drank two bottles of wine a day while he worked at BAML, says it didn't interfere with his work. (Daily Mail)
Wall Street bosses have seen the dollar costs of their operations in the UK fall by almost a fifth thanks to the slump in the pound since the referendum. (Financial News)
Pro-Brexit lobby group makes (unsubstantiated) claim that the City will save $14.6 billion in regulatory spending outside Europe. (Bloomberg)
David Reis, who was formerly the head of technology at Goldman Sachs’s merchant banking division in Europe, joined private equity fund Warburg Pincus. (Financial News)
"I believed in the Number for a long time. I always thought that I was just a couple zeroes from achieving a personal safety net that would allow me to finally live worry-free." (Quartz)
Point72's Academy received 7,200 applications for about 15 positions for its next intake. (Financial Times)