Can Europe produce a top-tier global investment bank? The British have proved they can't. BZW and NatWest Markets were disasters and though they have spawned successful offshoots, Barclays Capital and Greenwich NatWest are to British investment banking what Greg Rusedski is to British tennis - technically British, actually North American. Bob Diamond and Tom Kalaris are ex-CSFB and JP Morgan respectively, and NatWest bought Chip Kruger and Gary Holloway's Greenwich Capital whole.
Now it seems that Deutsche Bank is finding it tough too. Deutsche started right. It saw what others had failed to see. If Merrill Lynch is worth $30 billion it cannot be possible to build a credible investment-banking presence for a few hundred million dollars (take note Rabobank). It saw that its existing commercial bankers weren't up to the job. And it saw that its regional heads would have to yield to global product chiefs. So Deutsche spent a lot of money on experienced investment bankers and gave them the power to sell what they liked where they liked. And it worked. The bank gained respect in key markets.
Then came the Asian crisis. The bank blanched at the volatility it suddenly realized underlay DMG's profits, and tradition took over: a strong regional head was more important than anything else.