The idea that German government support for a Deutsche Bank-Commerzbank merger is back-door nationalization – bringing Deutsche to heel, not just facilitating a bailout – reflects an ever-clearer reality in European banking. Unrelenting reassertion of public control over European banks is the biggest cause, not just the result, of their widening profitability gap and their increasing lag in terms of international assertiveness versus the Americans.
The same dynamic is at play in Banco Santander’s recent attempt to hire Andrea Orcel. In a different political environment, Santander might have got away with its hastiness in naming Orcel chief executive, despite the need to take on €50 million in deferred pay from UBS.
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Andrea Orcel |
Not so now: Orcel goes against the spirit of the times, however much Santander might need a charismatic outsider to boost its capital and grasp important strategic decisions. UniCredit’s chief executive Jean Pierre Mustier did just that at UniCredit – but while Orcel’s hiring collapsed over his rewards from UBS, Mustier has embraced austerity and voluntarily cut his own pay.
Accusations of anti-money laundering failures are sweeping across Scandinavia and Europe from Danske Bank’s Estonian branch, with Deutsche Bank’s shares one of the most affected.
