Can Rothschild reinvent itself?
The House of Rothschild doesn't look as solid as it used to. In a world of supermarket banks, the days of the corner shop may be numbered even if it has the best name in the business. But Rothschild is fighting the trends with a major reorganization. Brian Caplen analyzes the plan and looks at the vexed issue of succession
Rothschild, one of the UK's most traditional banks, is in the mood for change. Having survived war, depression and bitter family struggles, this ancient empire faces new challenges to its might those of global markets and financial volatility.
Prompted by customer demands and the Baring crash, Rothschild is taking a long hard look at itself. And what it sees is a bank crying out for reform a sprawling collection of companies without logical structure; businesses duplicated around the world in a way that defies modern management; and a name that still opens doors at the highest levels but lacks the mystique it used to have. These days counterparties want financial disclosure as well as a name.
But there are positive elements one is a culture that, in some parts of the bank, allows employees to indulge their fantasies. In contrast to big investment banks where creativity can be killed by the rulebook, enterprise is alive and kicking at Rothschild. This has enabled the bank to emerge as a world leader in privatization advisory and to pioneer gold and other precious metals derivatives, such as gold forward rate agreements.