A Most Unusual CEO
Anshu Jain, former co-chief executive of Deutsche Bank, 1963–2022
One of the main principles of Jainism, the ancient Indian religion that guided Anshu Jain, the top Deutsche Bank executive who died abruptly of cancer this week, is Anekantavada — or many-sidedness.
Translated loosely: truth and reality are too complex for simple definition, they are best grasped via a variety of different perspectives, shadings of what is real and what isn’t.
This is apt on several different levels. Wall Street titans tend toward the blunt, the brash, the predictable. They may not all be alike, but ultimately they are who they seem to be.
Jain, who was 59, was no such animal. Beyond his unusual circumstances — he was the son of a government bureaucrat, raised in provincial India — Jain never presented like the standard bank CEO. He was quiet, reticent, polite and, more than anything, unreadable. You would sit down with him for an hour and leave with more questions than answers in terms of who he was and what he wanted.
Jain was trained as a derivatives technician, but made his name as a salesman. He worked and thrived in an industry fueled by ego and personal flash, yet he was a vegetarian ascetic who married his high school sweetheart. I am an Indian with a British passport who works for a German bank, he liked to tell people.
If you are going to run one of Wall Street’s largest and most aggressive investment banks, such a shape shifting aspect can be desirable. Saying one thing and doing another lies at the root of most financial engineering and in this respect the engine room at Deutsche Bank was legendary.
The firm’s traders and bankers operated at the far frontier of financial innovation and risk, concocting and promoting an array of racy fare, from arcane interest rate swaps to credit derivatives and souped up mortgages. For a time, the profits were explosive, propelling Deutsche to the top of the league tables until it all blew up in 2008. Deutsche, unlike its American counterparts, did not need a bailout but the subsequent regulatory punishments nearly finished the bank.
One should not pin Deutsche’s sins on Jain. His predecessor Josef Ackermann and the bank’s board are ultimately responsible. They wanted to play in the big leagues with Goldman and JP Morgan, but were always conflicted — the lure of the high risk high return securities business often clashed with the bank’s rooted German reserve.
As such, Jain never had a truly free hand: he was lauded when times were good, and when they were not, the knives came out and the whispering began. He did not speak German, he was too much the Wall Street creature….. ultimately he was never given full rein. Instead he was required to share the CEO crown with a faceless German, even though the banking unit he built and ran delivered 80 percent of Deutsche’s profits.
Of all the Wall Street types I covered, Jain intrigued me more than most. He was among the vanguard of hungry, whip-smart Indians who took Wall Street by storm in the early to mid 1980s. Most of them did not have Ivy League pedigrees, just vast ambition and innate ability to master the complexities of securitized finance, the main area of focus for investment banks at the time. Jain was a derivatives expert and at Merrill Lynch in the late 1980s and early 1990s, he fell in with a crowd of like minded bankers and traders led by Edson Mitchell. Mitchell was a highly charismatic builder of businesses who in 1995 was recruited by Deutsche to create its own investment bank. Over a five year period Mitchell hired over 2000 bankers and soon Deutsche was going head to head with the top banks on Wall Street.
Jain was Mitchell’s top deputy and played a critical role in those formative years. In 2000, Mitchell, who was on track to run Deutsche, died at the age of 47, when a small plane he was on crashed into a mountain in western Maine. Suddenly Jain was the face of Deutsche Bank’s investment banking division, now the engine of the firm’s profits.
Jain had a tremendous following within the bank. He understood the nuts and bolts of the business more than any of his CEO peers and his cool demeanor had a calming effect, even in times of extreme stress. I am intensely relaxed, he would often say with a telltale smirk. Wall Street CEOs like to brag about their ability to command the loyalty of the troops, although it is generally fear and greed that are the root of the matter.
In Jain’s case, the devotion was real. When Bill Broeksmit, one of his longtime risk deputies committed suicide in 2012, distraught over the scandals that were looming over the bank, he left a note for Jain, as well as close family members.
Anshu,
You were so good to me and I have repaid you with carelessness. I betrayed your trust and hid my horrible nature from you. I can’t even begin to fathom the damage I have done.
I am eternally sorry and condemned.
Bill
It was a harder task though to balance the pressures and demands of a restive board, probing regulators and unhappy shareholders in a post 2008 financial environment. When Deutsche found itself ensnared in pretty much every major scandal of that era — bust mortgages, interest rate deceptions, money laundering in Russia — Jain and his co-CEO were forced to step down in 2015 after just three years on the job.
My last contact with Anshu was late December 2016 — about the time that his duodenal cancer was diagnosed.
I was finishing up a story on Anshu’s legacy at Deutsche. It was a tough piece. Deutsche had become a punching bag, with questions in the market as to whether the bank would survive. Anshu, even more than a year after leaving, was an easy target for critics. My story reflected as much.
I sent him an email, laying out some of the major themes, and how he was being portrayed in the piece.
He was quick to reply — and he was forceful in defending his track record at Deutsche, highlighting his and Mitchell’s accomplishment in building a world class investment bank in just five years. He was unflinching about the scandals that followed — but he also pointed out, rightly, that Deutsche was not alone in its sufferings.
Few regret the travails more than I, that GM (Global Markets, Deutsche’s investment banking division) has been subjected to over the past decade. They have indeed taken a toll on the bank reputationally and have hurt the capital. Yet, you won’t be able to name one competitor that entered markets and hasn’t paid a price commensurate with its market share. The overall record isn’t one I’m happy with by any means but is in line with our market share and not idiosyncratic in a meaningful way.
A stand up answer from a stand up and — many-sided — man.
