In a lakeside Swiss village in August 2013, a few days before Bill’s retirement became official, Pierre Wauthier killed himself. His wife found him hanging inside a converted hotel in which he lived with her and their two children. Wauthier, fifty-three years old, was the chief financial officer of Zurich Insurance Group. His typed suicide note blamed the company’s chairman for putting him under unbearable pressure to boost profits. The chairman was Joe Ackermann.
After Putin’s job offer fell through, Ackermann had arrived at Zurich Insurance to lead the company’s board of directors. It didn’t take long for him and Wauthier to begin feuding over Zurich’s finances. Ackermann, of course, was not a man who liked to be disappointed. And the company’s numbers—especially its all-important return on equity, the same metric that Ackermann had obsessed over at Deutsche—were sagging. Wauthier had been on the receiving end of Ackermann’s tirades.
A few days after Wauthier committed suicide, Ackermann resigned from the insurance company’s board. “I have reasons to believe that the family is of the opinion that I should take my share of responsibility, as unfounded as any allegations might be,” he explained.* Broeksmit and some of his friends knew Wauthier from when he had worked at JPMorgan. Emailing with each other, they discussed the tragedy. “Ackermann does [not] look too good in this,” Flavio Bartmann wrote to the group.
Broeksmit’s last day of work was August 31. “There was really no logical next step for me at DB after board appointment fell thru, which is fine,” he explained to Val in an email, referring to the ill-fated chief risk officer job. “I lasted a lot longer than I thought I would.” Two months later, Jain hosted a small lunch in Broeksmit’s honor in a dining suite in the bank’s London headquarters. About a dozen people attended. As the bankers ate a light three-course meal—salad, lamb, and fruit—Jain gave a little speech, toasting Broeksmit for his hard work.
Bill turned fifty-eight that fall. He and Alla intended to stay in London for at least another year. They made plans to tour South Africa and Iran the following spring. He tried to learn French, enrolled in a writing class, and prepared to get his British driver’s license. He experimented in the kitchen, engineering recipes the way he used to engineer derivatives. And he found himself drinking more and more, because it was something to do.
At Thanksgiving, Bill and Alla flew to New York. Broeksmit had lunch with a former Deutsche colleague, Saman Majd, who was now a professor at Yale. Broeksmit complained that he missed his job, the markets, the adrenaline, the intellectual challenge. “How do you manage it?” he asked Majd about retirement. Majd said he had discovered fulfillment in academia. He suggested that Bill find something new to engage his mind.
Broeksmit, though, remained immersed in his DBTCA work, unable to step away. Once a month, he flew to New York to participate in board meetings; he could have phoned in, but that struck Bill as irresponsible.
There were so many problems. It struck Broeksmit that while nobody in Europe was paying attention to what this subsidiary was doing, DBTCA also didn’t have much of its own senior staff. Broeksmit pushed for DBTCA to hire a chief financial officer—not a crazy idea for a company with tens of billions of dollars of assets coursing through it—and for an internal investigation into why on earth DBTCA had been making complex, poorly documented loans to other Deutsche entities around the world. “I know this won’t be a popular suggestion but perhaps we need a more radical break from the past than so far proposed,” he emailed Jack Brand. In fact, Brand was trying to recruit more staff, but it was hard to find high-quality people who were palatable to his German bosses. At one point, he was hoping to hire a former FBI agent or prosecutor to be in charge of preventing financial crime. He presented a few promising candidates. The response came back from Frankfurt that none were acceptable because they didn’t speak German. The job ultimately went to a German speaker who lasted six months before being pushed out. And the CFO position that Broeksmit had lobbied for never got filled.
Brand had moved quickly to build relationships with officials at the Federal Reserve, seeking to quell their concerns but also to protect himself should things go south. He explained to the Fed over and over that his superiors in London and Frankfurt didn’t seem to be taking seriously the urgent need to expand the ranks of compliance, legal, finance, and tech staffers. Sometimes he invited the Fed to come to internal meetings when he knew a senior executive was visiting from Frankfurt. (The presence of powerful regulators at a closed-door meeting tended to serve as a helpful wake-up call for the German guests.) Brand figured the Fed would exert pressure on Deutsche, and that would help him accomplish things that were in the bank’s long-term interests, even if the bank didn’t realize it.
In September 2013, the Fed reported the results of an intensive on-site examination of DBTCA. The bank’s systems were the “worst of our peers,” a DBTCA official emailed board members, recounting the dressing down they had just received from the Fed. “Every key area has issues,” the bank had “missed big time” when trying to address its deficiencies, and the problems the Fed had identified “are just scratching the surface.” The central bank soon downgraded a crucial rating that governed how much money DBTCA could borrow from the central bank. It was a bad sign.
Broeksmit feared that more problems lurked ahead. “I am still tangled up in DB legacy matters,” he emailed his long-ago Merrill colleague John Breit. The Fed conducted periodic stress tests on the companies it regulated, and Broeksmit thought that DBTCA wasn’t taking the exams seriously. He repeatedly told his colleagues in the bank’s newly created “Center of Excellence”—established to overcome a history of governance that was less than excellent—that the simulations they were running were far too mild, that it looked like the bank was cherry-picking favorable data while ignoring figures that would raise uncomfortable questions. “Bottom line: I think we should be more conservative,” he wrote. Some of Bill’s colleagues sensed his mounting discomfort. “It really bothered him that everything he’d helped build”—namely, the bank’s Wall Street business—“became the root cause of so many problems,” a fellow DBTCA board member would explain. Broeksmit felt he was being forced into defending an institution that he no longer believed in.
One afternoon in December, Bill arranged to see his old Deutsche partner Martin Loat. Bill showed up at Gail’s coffee shop in Chelsea, sweating in his gym clothes. The two men sat in the crowded café and reminisced about old times. Loat had been out of the banking industry for a decade now, ever since he quit in frustration with Ackermann, and he told Broeksmit that he had pared down his life. He lived in a smallish house by the River Thames—or at least it was small compared to the Belgravia mansion he’d previously occupied. He spent his time jogging, skiing, and going to pub quizzes (trivia nights) with his mates. “All the simple things,” Loat explained. He tried to get Broeksmit enthusiastic about this new phase of his life, but his former coworker was still dwelling on Deutsche. He asked Martin about that time, many years earlier, when Bill had advised him to cancel the derivatives deal with the confused client and then had relayed to him Reverend Jack’s lesson: Do right by others, be honest with them and treat them ethically, and things will work out in the end. Loat got the clear impression that Broeksmit was now wrestling with the same sort of problem at Deutsche—sketchy derivatives, big losses, an ethical morass. He asked Bill what was going on, but he demurred. Loat could tell that his friend was deeply troubled, but he didn’t push. After a few quiet moments, Bill changed the topic, and Martin let the conversation move on.
Before Christmas, Bill and Alla flew from London to Virgin Gorda in the Caribbean. After a few days at the Little Dix Bay resort with their daughters—during which Bill phoned in to a DBTCA board meeting to discuss the bank’s escalating problems with the Fed—they joined Bill’s close friend and Wall Street veteran Michael Morandi on his forty-seven-foot sailboat. They swam, snorkeled, drank cocktails, smoked, ran out of cigarettes, searched the boat’s ashtrays for half-smoked butts, and drank some more. When it was time to go, Bill and Alla sailed to the airport across choppy waters. Broeksmit, ruinously hung over, got sick. “Took several hours of being on land to regain my equilibrium,” he later emailed a friend.
When they returned to London, a DHL package was waiting for Bill at the Evelyn Gardens apartment. Inside was a thick stack of Deutsche documents, largely about how to pacify the Fed, sent to Bill in advance of an all-day DBTCA board meeting scheduled for the last week of January in New York. Bill and Alla both planned to make the trip. Beyond the DBTCA gathering, Broeksmit had some other business to attend to in New York. He told Alla that he was scheduled to sit down with federal officials—he didn’t specify which ones, and she didn’t ask. Broeksmit also had arranged to meet with his personal lawyers to sign an updated will.
In Italy, the collapse of Monte dei Paschi shook confidence in the rest of the country’s banking sector, and the government prepared to bail out other banks. Deutsche had recently reached a private settlement with the people responsible for winding down what was left of Paschi—essentially Deutsche’s way of apologizing for helping torpedo the world’s oldest bank. But even with that civil matter resolved, criminal investigations into the bank and its employees were under way. Michele Faissola would be among those charged with aiding the Italian bank as it deceived investors and regulators about its finances.
BaFin prepared to open an investigation into whether Deutsche helped Paschi conceal losses. The inquiry, led by an outside law firm, was scheduled to begin on Monday, January 27, 2014.
On Friday, January 24, Anshu was in the Swiss ski village of Davos. The annual meeting of the World Economic Forum—where the world’s most important and self-important people gather each year to admire each other under the guise of making the world a better place—was in full swing. Among its longtime skeptics was Broeksmit. “That’s where the world’s great issues are really solved, with the aid of alcohol and unburdened of opposing viewpoints,” he had snarked in an email to his friends several months earlier.
Jain, though, was in his element. Like other captains of industry and finance, he packed scores of meetings into each day, with enough time left over to hold forth on weighty matters in front of captive audiences and TV cameras. At one point, he and other bank CEOs met with Mark Carney, the governor of the Bank of England, who privately chastised them for continuously getting in trouble with the authorities. Jain made some small waves by urging Carney and his fellow regulators to back off.
That same day, Anshu and his wife, Geetika, were at an event when they spotted Ackermann across the room. He had been their nemesis, the one thing standing between Jain and the throne he deserved. Now Ackermann was waving at them. Anshu and Geetika walked over and greeted him. They told him he looked great—had he lost weight?—and invited him to stop by a party Deutsche was throwing that evening.
The festivities took place at the Belvédère Hotel, a once-grand lodge that had snipers stationed on the roof to protect dignitaries during the World Economic Forum. The venue for the bank’s party was a windowless room that normally housed a swimming pool. The lights were low, music was pulsing, and waiters milled through the crowd with trays of refreshments. This night, the pool had been covered up with temporary flooring, and partygoers had no idea that an inch or two of carpeted plywood was all that stood between them and several feet of chlorinated water. The pool might have been invisible, but it created a muggy atmosphere, Deutsche’s festive facade failing to conceal the murk below. Bald men’s heads shined with sweat.
Jain and Jürgen Fitschen worked the room, greeting the mostly German clients. Their goal was more than just making their customers feel loved. They also were trying to make a statement about their ability to work together; rumors had been circulating in the German media that Jain was trying to oust Fitschen and be the sole man atop Deutsche. Anshu, who had struggled so mightily to win over the German establishment, had help this evening: Geetika was cosmopolitan, charismatic, and attractive. Good at chitchat, wowing strangers with tales of her adventures as a travel writer, she humanized her husband.
To the Jains’ surprise, Ackermann made an appearance at the party. Maybe it was the fact that he’d been chastened by the Zurich Insurance disaster, but he seemed to have mellowed. The two rivals spoke wistfully about their years together at the bank, breezing past their recent acrimony.
The party ran into the early hours of Saturday morning. The alcohol kept flowing, and Anshu and Jürgen draped their arms around each other’s shoulders in a public display of camaraderie. In this small Alpine town, far away from the daily drumbeat of awful news, it seemed like a fine moment for Deutsche Bank—its leaders united (and perhaps drunk), its clients happy, its future bright.
A few hundred miles to the northwest, Bill and Alla went out to dinner in London. Afterward, lying in bed together, they had a quiet talk. “How could we be more happy than we are right now?” Bill asked rhetorically. “We’re so lucky.” Then, for the final time, he fell asleep.