Key Takeaways
- Josef Ackermann is a Swiss banker who served as CEO and chair of Deutsche Bank.
- Ackermann served as the chair of the Bank of Cyprus.
- He was a member of the Group of Thirty, a Washington-based financial advisory board.
Early Life and Education
Josef Ackermann was born on Feb. 7, 1948, in Walenstadt, Canton of St. Gallen, Switzerland. He attended the University of St. Gallen, where he studied economics and social sciences, ultimately earning a Ph.D. in economics.
Ackermann began his career as a corporate banker with Credit Suisse in 1977. He remained at Credit Suisse for 25 years, attaining positions of general director and board member.
Transforming Deutsche Bank
In 2002, Ackermann joined Deutsche Bank as its CEO with a vision to position it as a global investment bank. He led significant mergers, enhanced international operations, instilled a shareholder-centric management strategy, and amplified the bank’s focus on investment banking.
During his tenure, Ackermann confronted investigations by the U.S. Justice Department concerning Deutsche Bank’s involvement in subprime mortgages, a contributing factor to the 2008 Great Recession. Investigations revealed that Deutsche had misled investors about loans backing $1.4 billion in securities issued in 2007, causing substantial losses.
Defining a Subprime Mortgage
A mortgage loan considered risky, typically granted to individuals with poor credit scores.
Simultaneously, as the chairman of the Institute of International Finance (IIF), Ackermann played a pivotal role in addressing the financial crisis and subsequent Eurozone debt debacle.
Josef Ackermann’s leadership brought substantial personal earnings, but also scrutiny. Notably, in 2009 he earned €9.6 million and €8.9 million in 2010. Facing sanctions from the U.S. Justice Department, Deutsche Bank sought to reclaim bonuses paid to Ackermann and other executives.
Ackermann stepped down from Deutsche Bank in 2012.
Notable Accomplishments
In 2014, Josef Ackermann took the helm as chairman of the Bank of Cyprus. His leadership was crucial in navigating the bank through a challenging phase involving the clearance of toxic assets and balance sheet restructuring. He served in this capacity until 2019.
Throughout his illustrious career, Ackermann has held board positions at renowned corporations such as Bayer, Deutsche Lufthansa, Linde, Mannesmann, Siemens, Zurich Financial Services, and Royal Dutch Shell.
Ackermann’s influence extended to the global stage through his membership in the Group of Thirty, an independent body of economic and financial leaders aimed at deepening the understanding of global economic and financial issues.
Josef Ackermann’s Interaction with Donald Trump
Donald Trump depended on Deutsche Bank for financing, with Ackermann allegedly approving Trump’s financing despite defaults on loans in 2004 and 2008. Ackermann later stated he couldn’t recall his direct involvement in these approvals.
Academic Contributions
Josef Ackermann has shared his wealth of experience by serving as a visiting professor of Finance at the London School of Economics and Johann Wolfgang Goethe University.
Legal Challenges
In 2004, Ackermann was acquitted of charges that he misused shareholders’ funds as a board member of Mannesmann AG, evading potential imprisonment in Germany’s premier attempt to hold executives accountable for excessive bonuses.
In Conclusion
Josef Ackermann’s journey as a Swiss banker chronicles his significant impact on the banking sector, notably during the 2008 recession. From leading Deutsche Bank and the Bank of Cyprus to holding prominent board and advisory roles across major corporations and global institutions, Ackermann’s legacy is defined by his profound influence and dedicated leadership in the financial world.
Related Terms: Investment Banking, Mergers, Subprime Mortgage, Great Recession, Corporate Finance.
References
- The Wall Street Journal. “Ex-Executive at Deutsche Bank Accused In Subprime Loan Case”.
- Yale School of Management. “Interview With Josef Ackermann”.
- Fortune. “Deutsche Bank Wants Bonus Millions Back From Its Former CEOs”.
- DW Akademie. “Ackermann To Rescue Bank Of Cyprus”.
- The New York Times. “Deutsche Bank And Trump”.
- American Banker. “Ackermann Cleared In Mannesmann Case”.
