Ivan David Herstatt

Iwan David Herstatt (born December 16, 1913 in Cologne ; † June 9, 1995 ibid) was a German banker and founder of the former Herstatt Bank in Cologne .

Bank clerk

Iwan David Herstatt could look back on an entrepreneurial family dynasty that can be traced back to 1727 in Cologne. He was the son of Johann David Herstatt (born March 27, 1887 in Cologne, † November 4, 1955 ibid) and Clara geb. Schnitzler (born August 18, 1893 in Cologne, † December 4, 1981 in Cologne), who married in January 1913. Since Ivan's father, Johann David Herstatt, was barely 1 year old when his grandfather died, his grandfather had to sell the ID Herstatt bank in March 1888 to the JH Stein bank , which continued and liquidated the banking business in its own name.

Iwan David Herstatt's parents moved with their son in 1923 into a villa built by architect Paul Bonatz in the villa colony of Cologne-Marienburg , Goethestrasse 67. Ivan David Herstatt graduated from high school in Cologne in 1931 at Kreuzgasse . He then began an apprenticeship at Deutsche Bank AG , which in 1940 promoted him to head of the credit department of Credit Industriel d'Alsace-Lorraine in Metz , which the bank had acquired , where he stayed until 1944. Between 1944 and 1950 he took a leave of absence and gained experience as a consultant at the Hessian banking supervisory authority in Wiesbaden. During this time he married Ilse Gerstenberg in Wiesbaden on January 22, 1948, with whom he had four children. In 1950 the family returned to Cologne. Here Herstatt took over the management of the branch of the Bank für Gemeinwirtschaft, founded in March 1950 . As a bank clerk, however, he was not in the traditional position of banker like his ancestors.

banker

That changed in 1955. After the death of the owner Hans Hocker († April 22, 1954), the insignificant Cologne bank Hocker & Co. (total assets: 52 million DM) was up for sale. It emerged from the Jewish banking house Sternfeld & Tiefenthal in 1938 through “ Aryanization ” . Iwan David Herstatt acquired the bank on June 2, 1955 with financial support from his childhood friend and insurance entrepreneur Hans Gerling and the Swiss machine tool manufacturer Emil Bührle ( Oerlikon-Bührle ) with a starting capital of DM 5 million. On December 10, 1955, the bank was transformed into “ ID Herstatt KGaA ”. Behind the legal form , which is rare for a bank , was Hans Gerling, with a contribution of DM 5 million, as a limited partner (81.4%; the rest was held by subsidiaries of the Gerling Group) and Iwan David Herstatt as a personally liable partner . Business operations began on January 2, 1956 in the previous business premises of the Hocker & Co. bank (Cologne, Unter Sachsenhausen 29–31) with 15 employees. In May 1957, the bank - now employing 70 people - moved to the U-shaped building on Cologne's banking mile Unter Sachsenhausen 6. Herstatt's expansive business policy led to rapid growth of his bank. In 1956, the balance sheet total was 72 million DM, in 1958 it was 171 million, in 1961 466 million, and finally in 1973 it rose to 2 billion DM. The number of employees grew from 15 (1955) to 850 (1971). But profits from the traditional banking business shrank.

The potential for profit was identified as the exchange rate fluctuations resulting from the release of exchange rates on May 10, 1971, which no longer moved within relatively narrow exchange rate ranges, but were almost entirely left to market developments by central banks . Since the customer business was not sufficient for this, foreign exchange trading was mainly operated as proprietary trading . Other banks around the world also saw profit opportunities in this. The decisive factor in the foreign exchange speculation was the assessment of the future exchange rate development of the US dollar and other important currencies.

Bank failure

The results of the last full financial year 1973 show how important foreign exchange trading was for the Herstatt Bank. Here an operating loss of 14 million DM was made, which is converted into an annual surplus of 34 million DM through profits from own business in foreign exchange trading of 48 million DM Million DM.

The end of 1973 had the financial statements of the Bank of the auditors an unqualified audit opinion received, according to which the financial statements was in line with the laws. A special report of March 11, 1974, taking into account foreign exchange and precious metal trading, came to the conclusion that, due to a substantial profit balance from these transactions at the end of 1973 and the settlements from January and February 1974, provisions for impending losses were not necessary and the business documents did not There would have been indications of a "misalignment". At the beginning of 1974 , the currency forwards that were carried out reached a volume of 8 billion DM, which means a profit or loss of 80 million DM with an exchange rate fluctuation of 1%. The volume of open forward transactions, at 103 times equity, was meanwhile in no reasonable relation to equity. The reason was that the rate of the US dollar had been falling steadily since January 1974, while foreign exchange trading with its head Dany Dattel had expected a further increase in rate. This meant that the foreign exchange closeouts had to be covered more expensively than they had previously been acquired. On March 18, 1974, foreign exchange trading posted a loss of DM 250 million, which on June 16, 1974 had already grown to 470 million.

On June 11, 1974, Herstatt informed the limited partners that an internal bank audit on May 31, 1974 had shown a loss of around DM 64 million on forward exchange transactions, which depleted 89 percent of equity . On June 16, 1974, Herstatt and the general agent Graf von der Goltz informed the limited partners that the loss was between DM 450 and 520 million. On June 23, 1974, the Herstatt Supervisory Board and Gerling CFO Anton Weiler, the President of the Deutsche Bundesbank and the Chairman of the Presidium of the Supervisory Board of the Gerling Group discussed the question of a rescue of the Herstatt Bank. Further talks on June 26, 1974 with the major banks Deutsche Bank , Dresdner Bank and Commerzbank about a rescue of the Herstatt Bank ended unsuccessfully. On June 26, 1974, the Federal Supervisory Office withdrew the permission granted to the Herstatt Bank to conduct banking business ( banking license ) in accordance with Section 35 (2) No. 4 KWG; it ordered the company to be wound up and ordered it to close its counters and stop its payments immediately until further notice.

responsibility

As a personally liable partner, Iwan David Herstatt was, by virtue of law ( Section 164 HGB), at the same time a board member who managed and supervised the banking business. In turn, the chairman of the supervisory board, Hans Gerling, was legally obliged to monitor the bank's board of directors. The bankruptcy of the Herstatt Bank on June 26, 1974 was due to excessive foreign exchange speculation, manipulation in accounting, but also a lack of banking supervisory regulations. It was never possible to finally clarify in court whether and to what extent both persons fulfilled their control obligations.

In a criminal trial following the collapse of the Herstatt Bank on March 23, 1979, Herstatt was initially sentenced to four and a half years imprisonment by the Cologne Regional Court on February 16, 1984 , but due to an appeal, he did not serve this sentence. The verdict largely confirmed the prosecution's criminal charges, namely embezzlement and aiding and abetting in a particularly serious bankruptcy . The public prosecutor's office accused him of falsifying the balance sheet because, as a personally liable partner, he had signed the balance sheet for the 1973 financial year with a profit of almost 20 million marks, although a loss of 440 million marks should have been reported. The falsification of the balance sheet resulted in the accusation of breach of trust because dividends and royalties were forbidden from the alleged profit and the accusation of fraudulent bankruptcy because Herstatt is said to have made prohibited dispositions shortly before the bank closed. In October 1985, however, the BGH overturned this judgment against Herstatt. In a new trial that began in 1987, the sentence was reduced to two years' probation . In 1991 Herstatt was finally declared incapacitated because of the rare Pickwick syndrome ; the overweight banker allegedly lost his concentration and was plagued by attacks of fatigue.

Until his death in 1995, Herstatt saw himself as the victim of a conspiratorial fraud, as he claimed in his 1992 book The Destruction . He believed that his former head of the foreign exchange department, Dany Dattel, was the main culprit in covering up and downplaying the imbalance.

publication

• Iwan David Herstatt: The annihilation. Glory and end of the Cologne bank ID Herstatt or how I was cheated of my life's work. Edition q, Berlin 1992, ISBN 3-928024-90-6 .

Web links

• Biography in the portal Rheinische Geschichte
• Picture of his grave

Individual evidence

1. ↑ Albrecht Blank, ancestral Bank Herstatt
2. ↑ His daughter Claudia Herstatt (1948–2012) was a famous art critic, his son Johann David Herstatt (born December 21, 1952) has a doctorate in business administration and lives in Hamburg.
3. ↑ ^{a b c} Robert Steimel, JD Herstatt - The old and the new banking house , December 1963, p. 51 f.
4. ↑ Ingo Köhler, The "Aryanization" of the private banks in the Third Reich , 2005, p. 357.
5. ^ The property of the Schaafhausen'schen Bankverein, which was destroyed in the war
6. ↑ Wolfgang Filc, Interest arbitrage and currency speculation , 1975, p. 13.
7. ↑ Played, deceived, cheated . In: Der Spiegel . No. 13 , 1975 ( online - March 24, 1975 ).
8. ↑ BGH of July 9, 1979 (BGH NJW 1979, 1879 = WM 1979, 873)
9. ↑ Volker H. Peemöller / Stefan Hofmann, accounting scandals: delicts and countermeasures , 2005, p. 81.