Macaskill on markets: Deutsche Bank’s lessons for SoftBank
It is 10 years since Rajeev Misra left his position as head of credit and commodities at Deutsche Bank in a move that came a couple of months ahead of the failure of Lehman Brothers and a global financial crisis.
His former employer has never recovered from the excesses of the era, when a group of derivatives experts built a trading business that eventually proved to have serious long-term risk-management flaws.
The day after its recent stress-test failure in late June, Deutsche’s stock price was below €10 – or less than a quarter of the price when Misra left in 2008.
The reasons provided by the Federal Reserve for singling out Deutsche as the only firm to fail the stress test this year are worth citing in full.
“Those concerns include material weaknesses in the firm’s data capabilities and controls supporting its capital planning process, as well as weaknesses in its approaches and assumptions used to forecast revenues and losses under stress,” the Federal Reserve said.
Now Misra and a group of veteran bankers – many of them former Deutsche colleagues – are becoming increasingly important to the functioning of SoftBank, a hard-to-understand technology conglomerate.
Misra runs the SoftBank Vision Fund, which is the biggest technology investor in the world. He serves on SoftBank’s board and was in June promoted to executive vice-president, which led to articles in different venues speculating that he is a candidate to replace Masayoshi Son as chief executive in the event that the founder of the company steps down.