Marks for the Market

While years of balance of payments deficits have weakened the dollar and forced the U.S. to curb the outflow of its money to foreign countries, the rising strength of the Deutsche mark has impelled West Germany to take an opposite course. To offset their embarrassingly big trade surplus ($4.2 billion last year), the Germans have started exporting large quantities of investment capital to the rest of the world. Last year that flow of money reached $900 million, and this year it is expected to grow even further, to $1.5 billion. Reinforcing the trend, Germany's aggressive Dresdner Bank has just decided to move into the stock-brokerage business in the U.S. The bank, Germany's second largest, with assets of $3.9 billion, is forming a wholly owned U.S. subsidiary for its new venture. It has already won permission to buy a seat on the Boston Stock Exchange, where it will be the first foreign member. The bank also has applied for a seat on the Midwest Stock Exchange in Chicago and for associate membership in the Philadelphia- Baltimore-Washington Exchange. A ban on foreign members will prevent it from joining the New York Stock Exchange.

At a Disadvantage. Competitive pressure prompted the invasion. At least a dozen U.S. securities firms have begun operating inside Germany in recent years, attracting increasing numbers of German investors to U.S. corporations. German banks, for whom securities' underwriting and trading is an important source of profit, found themselves at a disadvantage because they had to pay commissions to U.S. brokers when buying American stocks for clients.

Impressed by the strong reach of U.S. banks for global business, the Dresdner Bank has been expanding abroad in other ways. In 1965, it was the first large German bank to open a representative office in Manhattan. Last year it became the first German bank to join a major multinational banking combine when it helped to found the Societe Financiere Europeenne in Paris. The Dresdner's year-old Luxembourg subsidiary is thriving in the fast-expanding Eurobond and Eurodollar markets. Increasing its stake in Latin America, the bank last year bought an interest in local banks in Brazil, Chile and Colombia.

Transforming the Clerks. "We have been trying to broaden our business," says Managing Director Erich Vierhub, 66, "and now we are harvesting the first successes." One of Vierhub's main aims is to "transform staid bank clerks into money salesmen"--a formula that works at home as well as abroad. One of the Dresdner's mutual funds, Concentra, has grown into the country's second largest (assets: $226 million). From its coequal headquarters in the cities of Frankfurt, Dusseldorf and Hamburg, the bank has opened 650 branches across West Germany, adds new ones at the rate of 70 a year. Last year the effort to woo deposits proved so successful that the Dresdner's total funds increased by 20%. That $650 million growth was the largest of any bank's in the country.

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