Merger of Deutsche Bank and Disconto-Gesellschaft

The concentration of the German banking industry continued in the twenties and peaked in 1929, when Deutsche Bank merged with its strongest competitor, Disconto-Gesellschaft. For eight years Germany's largest bank by far operated under a double name: Deutsche Bank und Disconto-Gesellschaft, before returning to its former, far more memorable name in 1937. Growing costs were one reason for the merger. Another was the trend towards concentration throughout the industry. The merger was the most notable event in the German financial world for decades and came at just the right time to counteract the emerging world economic and banking crisis.

In view of its political impact, this crisis was the most fateful economic event of the century. The liquidity shortage which hit the banks was fuelled by a combination of short-term foreign debt and borrowers who were no longer able to pay their debts; the crisis was heightened by the inflexibility of the state. For the German banks the crisis in the industry was a watershed. A return to circumstances, reminiscent perhaps in certain ways of the "golden era" before World War One, was not possible for many years. Instead the banks went onto the defensive and subordinated themselves to the power of the state until after 1945.