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6 - Liability Management and the Transformation of Deutsche Bank

Published online by Cambridge University Press:  07 August 2025

Mareike Beck
Affiliation:
University of Warwick
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Summary

Chapter 6 delves into the heart of Deutsche Bank’s transformation towards a US investment bank. It situates the changes of Deutsche’s business model within its play of catch with US banks: To compete in Eurodollar markets, German banks had to find a way to institutionalise their connections to US money markets to improve their access to USD. The attempts to adopt liability management (LM) drove Deutsche’s partial uprooting from its home market to relocate to the US. This challenges the dominant narrative of a US imposition, instead recognising that the trajectory of change was driven by Deutsche’s strategies of extroversion. Tracing the specific practices of Deutsche’s foreign acquisitions and strategies on US money markets, this chapter reveals that Deutsche had to progressively change its traditional practices to accommodate the imperatives of LM. This transformation went from a change in funding strategies to acquire more USD to the corresponding adaptations on Deutsche’s asset side – from corporate loans to US residential mortgage-backed – or ‘toxic’ – securities. This chapter thus presents Deutsche’s move away from the centre of Germany Inc. towards a US investment bank as an outcome of the imperatives of extroverted financialisation.

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Type
Chapter
Information
Extroverted Financialisation
Banking on US Dollar Debt
, pp. 105 - 126
Publisher: Cambridge University Press
Print publication year: 2025

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