Axel Weber, former head of the German Federal Bank, has been appointed president of Swiss financial giant UBS. The move means a headache for Deutsche Bank, which is still looking for a successor to Josef Ackermann.
Weber has his sights on a lucrative job in Switzerland
The appointment of Axel Weber as head of Swiss bank UBS has pulled the rug from under the feet of Germany's most powerful financial institution, Deutsche Bank.
Speculation had been rife that Deutsche Bank was apparently counting on Weber to take over from current president Josef Ackermann when his contract runs out in two years.
Weber, the former head of the German Bundesbank, will not immediately take over as president of UBS but instead start as vice-president, heading up the administrative board before he replaces Kaspar Villiger as chairman in 2013. This will give him some buffering time, as he has scant experience in the world of commercial banking.
Weber has been at the heart of international financial affairs for many years
The appointment is in many ways a surprise, considering the ties between Weber and Ackermann. The two are said to be good friends, and it was Ackermann who initially suggested that the 54-year-old would be capable of taking over his job. "The right personality can learn anything, but you can't learn to have the right personality." he said in a recent interview,
Not bad news for Deutsche Bank
But others don't think it's that simple. Dieter Hein, banking analyst with the independent research company Fairesearch, believes Deutsche Bank dodged a bullet in losing Weber.
"He has no experience running a commercial bank," Hein told Deutsche Welle. "And Deutsche Bank is not any old commercial bank, it's the commercial bank. Even if the rumors were true and Weber was a candidate, Deutsche Bank would have been taking a big risk."
Dirk Becker, analyst at Kepler Capital Markets, believes Weber was Deutsche Bank's first choice. "For me, he was really the most logical solution to the situation," he told Deutsche Welle. "He had good political contacts; he was part of the discussion on regulating the banks – internationally as well as domestically. He's just a brilliant aficionado of the finance scene."
Hein sees Weber as a much better appointment for UBS than for Deutsche Bank. "If Weber takes over as head of the administrative council at UBS for the foreseeable future, then that is a good choice because then he won't have so much to do with day-to-day operations," he said.
Hein doesn't understand the current discussion. "Ackermann's contract is set to run for another two years, and I think Deutsche Bank would be ill-advised to name a successor publicly now," he said.
There should be no shortage of candidates to run Germany's most important bank
Hard line on Europe
Weber's rise to prominence has been steep. He came from an academic background, holding professorships in Bonn and Frankfurt, from where he ascended to the ranks of Germany's so-called economic "wise men" - the German Council of Economic Experts. He was appointed head of the Bundesbank in 2004, but took the international banking community by surprise earlier this year when he announced his resignation, effective from the end of April.
Weber has never been afraid to stir up trouble. As Bundesbank chief, he clashed with Nicolas Sarkozy when the French president leaned on the European Central Bank to cut interest rates.
Ackermann still has two years to go in the hot seat
His resignation from the Bundesbank also angered the German government because it deprived Chancellor Angela Merkel of her candidate for the head of the ECB. Weber was one of Merkel's key advisors during the financial crisis of 2008 and had been mooted as a possible successor to Jean-Claude Trichet, who leaves the ECB presidency at the end of October.
Weber's decision to back out was reportedly rooted in his opposition to the central bank buying bonds and straying from its inflation-fighting role. His position on Greece was also tough, as he believed it would be a mistake to rule out allowing the country to default.
Other rumored candidates for the Deutsche Bank top job include Reto Francioni, CEO of the German stock market operator Deutsche Börse, Paul Achleitner, financial chairman of insurance giant Allianz, and Anshu Jain, currently the chief investment banker at Deutsche Bank.
"I'm pretty sure Deutsche Bank will find someone," said Becker. "I mean, they have another two years, and it's a good job, isn't it? I'm sure there are people who are interested in it."
Author: Ben Knight
Editor: John Blau