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DZ Bank: wider distribution for fixed income

Jochen Friedrich arrived at DZ Bank last year to become head of fixed income. This bank, along with WGZ Bank, is one of the two central institutions linking Germany's mutual banking network. Consolidation is under way among the cooperatives as well as the Landesbanken. DZ itself is the product of a difficult merger between DG Bank and GZ Bank, and expects the total number of German cooperative banks to fall from about 1,600 today to roughly 800 by 2008.

Motive for moving
Friedrich used to run German capital markets at JPMorgan, so moving to DZ's headquarters was something of a cultural shift. He says he made it because he thinks DZ is where he can make the biggest difference in addressing the biggest structural problem in German banking - mispriced credit. Friedrich hopes recent deals - particularly the e1 billion issue for Deutsche Telekom - have shown issuers and lead managers that including DZ in a syndicate can improve distribution. He says: "The Deutsche Telekom deal has performed incredibly well since launch, and has proved to the market that we can handle deals of this size and, given our broad distribution, provide for more stable spread developments."

Like WestLB's Taiber, he says the smaller, more buy-and-hold oriented accounts that his bank has relationships with provide attractive stability in the secondary market, complementing the liquidity created by the presence of bigger, more active investors.

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