Business: ANALYSIS: Deutsche-Commerzbank Tie-Up Smacks of Despair

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Business: ANALYSIS: Deutsche-Commerzbank Tie-Up Smacks of Despair By Tim Cohen tim_cohen

Beware of the lipstick on this pig. The merger of two of Europe’s biggest lenders is a desperate government-orchestrated attempt to salvage what’s left from the wreckage caused by years of failed global ambitions, costly scandals, and policy failings at home.

Three decades spent chasing Wall Street have left Deutsche Bank with Europe’s largest investment bank – and one of the most unwieldy. Though the firm eventually gave up on trying to be the last man standing and has been retreating in some areas, the operation still accounts for about two-thirds of the overall firm’s risk-weighted assets after soaking up billions in fines for misconduct.

Critical to making the combination work will be the cost savings the firms can achieve in Germany. Some put the job cuts that are needed at as many as 30,000. Though the government has signaled it wouldn’t stand in the way of those losses, a marriage between the two won’t immediately solve the industry’s structural inefficiencies.

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