This may be specific to banking, and it's a bit of a hypothesis by the authors, but here's how I understand it: German banks have traditionally operated on the

This may be specific to banking, and it's a bit of a hypothesis by the authors, but here's how I understand it: German banks have traditionally operated on the local level – mortgages, financing local businesses, sometimes a medium-sized manufacturer. The opposite model is anglo-saxon investment banking: m&a, hedge funds, HFT, leverage. There are cultural components to both these models as well. Under the first, a good banker spends his nights drinking too much beer with the small-town mayor. Investment bankers spend their nights doing coke with some actress in a Hong Kong rooftop bar. (both exaggerated for effect) Now, the story goes, Deutsche Bank felt so inferior when they watched Wall Street that their traditional, stable business was relegated to second class. They no longer cared about the low end (everyday) market. The two problems they ran into were (a) investment banking turned out to be a rather volatile business, and they no longer had the steady income stream to support it, and (b) they probably tried so hard play blank, without actually having the necessary structures/experience etc. Cargo-Cult investment banking basically. (Fargo-Cult?)