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  Interview with Goldman Sachs Manager Dibelius: 'Some Aspects of Our Industry Seem Greedy'

Interview with Goldman Sachs Manager Dibelius 'Some Aspects of Our Industry Seem Greedy'

Part 2: 'The Current Crisis Is Too Big to Be an Anomaly'

Dibelius: No one could predict the impact of that decision. And even if the dynamics had been recognized and avoided in time, the bubble would probably have burst somewhere else, where the consequences would have been far more devastating. Until late summer, many still believed that it was nothing but a Wall Street problem. But the risks were already becoming apparent on many balance sheets, including those of German companies.

SPIEGEL: Well, that's certainly a twist: the Lehman bankruptcy as a beneficial catharsis.

Dibelius: This bankruptcy was a painful wakeup call...

SPIEGEL: ...for which we should thank Paulson? That's ridiculous!

Dibelius: I'm saying that Lehman made the problems clear to everyone all at once. But governments still had the opportunity to react, because the global dimension of the banking crisis had suddenly entered the public consciousness.

SPIEGEL: On paper, the once mythical investment bank Goldman Sachs is now just an ordinary commercial bank. How does that affect your work?

Dibelius: So far, little has changed when it comes to our business model. There are two reasons for this. First, why should we revise our strategy during a crisis phase, in the face of so many long-term uncertainties?

SPIEGEL: For one, because the US government is now demanding more transparency.

Dibelius: It now has many more options to monitor things. Second, we believe that the future outlook for our business is excellent. We too are not fail-safe, but we have been relatively successful since 1869. In general, however, it is true that the days of perpetual 25-percent after-tax returns in the financial industry are over.

SPIEGEL: The great thing about investment bankers like you is that they can turn a profit everywhere. First you arranged the merger of Daimler and Chrysler, and in the end Goldman Sachs helped break apart the two companies.

Dibelius: On balance, I doubt that we made that much on those deals. Besides, it's obvious that I would have preferred to see the merger succeed. Of course, we always try to make the best of a given situation for our clients.

SPIEGEL: And then there was the merger of Karstadt and Quelle to form Arcandor -- a true spectacle for your bank. And what was the purpose of that? Now the company is on the brink of bankruptcy once again.

Dibelius: I will not comment on clients. However, we don't have the master plan for the German economy locked away in some closet. You have a false impression of our role. We are a service provider. When we are called on, we try to help. Our role is often overestimated. Our clients are the ones making the decisions.

SPIEGEL: Perhaps the banking world would be different today if you hadn't built yourself up as such an archaically organized, macho business.

Dibelius: Now that's really below the belt! In case you haven't noticed, we bankers also live in an enlightened world and help to promote complex processes in a rational way.

SPIEGEL: Is Wall Street's rotten image that unjustified?

Dibelius: Yes, absolutely, especially when I consider that our company isn't the only one that promotes women and is involved in social causes beyond the scope of our actual business processes.

SPIEGEL: We have no problem with that. But the picture was long dominated by testosterone-driven Ferrari owners.

Dibelius: You've apparently spent too much time browsing through Tom Wolfe's "Bonfire of the Vanities."

SPIEGEL: "American Psycho" offered an especially horrific literary portrayal of the Wall Street investment banker.

Dibelius: And Konrad Kujau was part of the German media business. Nevertheless, I would beware of characterizing his forged Hitler diaries as somehow representative of your industry.

SPIEGEL: Is the current economic crisis merely an anomaly or evidence of a systemic problem?

Dibelius: It is simply too big to be an anomaly. A number of adverse developments coincided in an unfortunate way. But, for the first time, the international community has demonstrated the will to solve problems collectively.

SPIEGEL: Some cultural critics predict an end to capitalism.

Dibelius: A typical reflex. They were saying the same thing about the Internet bubble: that total hysteria would lead to a deep depression. And what happened? Good business models like eBay and Google survived everything and are now contributing in a positive way to economic development. In the same vein, I hope that the current crisis will ultimately help to improve our system, that of a market economy, of course, because everything else was reduced to absurdity throughout history. Freedom and responsibility must be the guiding principles.

SPIEGEL: In France, angry employees have recently started taking their managers hostage. In the UK and the United States, bankers have received death threats. The real question revolves around when this sort of economic crisis becomes politically dangerous.

Dibelius: We must all be careful not to allow the development of an isolated elite, otherwise dramatic tensions could develop in our society.

SPIEGEL: In the United States, an intensive search for the guilty is just now getting underway, complete with hearings and lawsuits. Why has it been so unusually quiet in Germany until now?

Dibelius: First of all, the US public is far more in tune with what happens on the capital markets than in Germany.

SPIEGEL: You mean because millions of Americans are watching their stock-based pensions go up in smoke.

Dibelius: Exactly. Public outrage in the United States over what happens in the financial industry is far more closely connected to politics and the judiciary. Besides, the Americans have a tendency to go to extremes. In one breath, they roll out the red carpet for the economy, and then you see senior executives being escorted out of their mansions in handcuffs. We saw similar things happen in the wake of the Enron and WorldCom scandals.

SPIEGEL: That explains the situation in the United States, but not in Germany.

Dibelius: Here in Germany, unemployment is the most important barometer of the public mood. What do you think the reaction would look like if we had five million unemployed? But the unemployment rate is an indicator that lags behind the financial markets. In the end, we could see the executives who are forced to announce layoffs being pilloried rather than those who caused the crisis in the first place. But if anything can change the political dynamics in Germany, it will be that magic number: five million unemployed.

SPIEGEL: Thank you very much for taking the time to speak with us.

Interview conducted by Wolfgang Reuter and Thomas Tuma

Translated from the German by Christopher Sultan