Prof. Dr. Udo Steffens: Designing a dynamic science landscape for the financial centre

“Europe needs a dynamic Germany! Who, if not Germany, along with France, should play the leading role?” This appeal was not part of the remarkable inaugural address in Berlin by Anshu Jain, the new Co-Chair­­man of Deutsche Bank – rather it was con­­tained in the manuscript of the first key­­­note economic policy address by Josef Ackermann, Jain’s predecessor, held in Frankfurt in early 2003. Then as now, Ger­­­­many was criticised, however, under com­­­pletely different signs. At the beginning of Ackermann’s tenure, the “German disease” was spreading: Germany’s weak eco­­nomic growth was regarded as dan­­­­gerous for Europe and the world economy. “We are no longer consid­ered to be the political and economic power­­­­­­house, but are regarded quasi as the third-generation Budden­­brooks, as ‘the next Japan’”, said Acker­­­mann nearly ten years ago. Back then, how­­­­ever, the financial centre Frankfurt was still a heavyweight.

Today, Germany is once again Europe’s driving force. However, the federal govern­­ment is under fire for its austerity meas­ures during the euro crisis. In the on­­-go­ing competition for companies and in­­stitutions, junior professionals and ex­­­pe­­rienced experts, managers and scholars, the financial centre Frankfurt is not only competing against London, Paris or New York, but also against Asia’s ambitious metro­­politan regions. The city and region needs, now more than ever before, a per­­formance-oriented, dynamic education and research landscape. After all, the intel­­­lectual potential is perhaps the most fun­­da­­mental characteristic of a successful financial centre.

FS-1109_09983-Kopie

Frankfurt has benefited for many years from its knowledge infrastructure. The metropolis on the Main river is a know­­ledge hub thanks to the Goethe Univer­­sity and the House of Finance, the Uni­­ver­­sity of Applied Sciences Frankfurt and the Frankfurt School of Finance & Man­a­­ge­ment. The University of Mannheim, the WHU-Otto Beisheim School of Manage­­ment in Koblenz-Vallendar, the Euro­­pean Business School (EBS) and the Wies­­ba­­den University of Applied Sciences all contribute to strengthening the city and region. However, the responsibility of a busi­­ness school for the location goes bey­­ond merely training highly qualified junior professionals. We see ourselves as a think tank, as a link between theory and prac­­tice, as a magnet for high potentials, for experienced managers and renowned scho­­lars. We unite people from different realms, think through issues and problems in an international context and deal with principle questions related to the future.

That is why the Frankfurt School of Finance & Management and its teaching, research, consulting and services always have a reference to business: we open new edu­­cation and career opportunities for skilled and management professionals with speci­­f­­ic university study programmes. Man­a­gers from around the world take advantage of our Executive Education Programme in Frankfurt and, increasingly, at com­­pany locations in India, China and the aspiring countries in Africa.

We see ourselves as the constructive spar­­ring partner for business in our develop­­ment of new education programmes and formats in addition to new research pro­­jects. We adapt to market developments and demands at an early stage: that is why we have introduced certification cour­­­ses for financing renewable energy resou­­r­­ces and for compliance. We have de­vi­­sed a Master of Risk & Regulation Mana­­ge­­ment together with the Frankfurter Insti­­tute of Risk Management and Regulation (FIRM). We also reacted early on to the les­­sons learned during the financial crisis by establishing the Bachelor of Mana­­ge­ment, Philosophy & Economics. We are now organising the Finance Futures Lab at the Frankfurt School of Finance & Management – a new think tank in which our professors will work together with scholars from other universities and with representatives from the practice to ana­­lyse recent financial and economic crises and derive scenarios for the future from them. One thing appears perfectly clear – something must happen and we must think ahead because future players also want change.

FS-1109_10243-Vorschau-Kopie

In many discussions, including with young peo­­ple and students, I sense the desire for clear regulations and, above all, clarity; but also a desire for an ideal banking world in which major and state banks no longer have to admit to billions in shortfalls and questionable transactions, such as hap­­pened with the Spanish Bankia, which overstretched itself with unsecured mort­­gage loans, or the British Barclays, who manipulated the world’s most important commercial interest rate, the Libor, or the US subsidiary of Standard Chartered whose illegal transactions with Iran became public. The financial crisis has long become a crisis of nations, as the world community has been unable to establish confidence in the financial sector since the Lehman collapse. However, confidence in people and institutions is decisive for a function­ing financial market. Confidence is also the basis of our numerous projects and initiatives we have been carrying out in developing and threshold countries since 1992. Many people there are denied ac­­cess to the formal banking and finance sectors. They are too poor. Doing business with them is not profitable for banks. How­­ever, these people are receiving access to financial products as part of the develop­­ment financing, which makes development and education possible for them and their families. We are active in the development and climate financing on all continents as part of the Development Finance Cluster, which Frankfurt represents along with KfW, GIZ, ProCredit and Gopa: nearly 100 ex­­perts have the responsibility for consulting and training mandates to establish local banking and financial systems. The port­­folio is completed by cooperation with the Université Protestante au Congo (UPC) in the Congolese capital of Kinshasa, where we organise a Master in Microfinance, as well as through the intensifying of Devel­­opment Finance in the Master of Finance at the Frankfurt campus. This project gives young people the opportunity to combine an interesting job with the goal of sustain­­ably improving the standard of living of the people in the developing countries.

We also use our vast experience for con­­­sul­­ting mandates for issues related to ener­­gy efficiency and renewable energies, pri­ma­­rily when mobilising investments in develo­­ping and threshold countries or developing cost-efficient tools for reducing CO2 emissions. Executive education pro­­gram­­mes and certification courses complete our offer. Together with the United Nations En­­vironment Programme (UNEP), we laun­ched the UNEP Collaborating Cen­­tre for Climate & Sustainable Energy Fi­­nance in July 2011. Scholars and consultants dedic­­ate themselves to the financing of rene­­wable energies in research, teaching and consulting. To this end, the Centre works together with financial in­­stitutions to de­­­velop technical expertise and innovative financing approaches for companies and consumers. It is closely tied to faculty as well as ongoing research and is establish­­ing itself as a think tank.

FS-1109_09978-KopieIn light of global competition, it is im­­port­ant to secure and expand Frankfurt’s posi­­tion as continental Europe’s most im­­portant financial centre. The European benchmark for the Frankfurt School of Finance & Man­a­­gement is London, which is renowned for its numerous competing, internationally ack­­­nowledged academic organisations, uni­­­versities and business schools. The London School of Eco­nomics, the London Business School, Ashridge and Cass, and their success in respective ran­­­kings document the strength of the British capital.

German universities and business schools are only a minor factor in this international education industry. The Hessen state go­­v­ernment has launched a trend-setting ini­­tiative with its support of the Goethe Uni­­versity and the House of Finance, which pro­­­­­motes and supports companies and patrons in the financial centre. However, greater efforts are required.

I am convinced that a strong economic na­­­tion such as Germany and sectors, such as banking and financial, which emphasise innovation and creativity, re­­­quire a dyna­mic academic landscape which plays an outstanding role in in­­ternational compe­­tition. The Frank­­furt School of Finance & Management is well prepared for such com­­petition. All players in the financial centre of Frank­­furt – government, business, asso­­cia­­tions, foundations, research and edu­­cation, NGOs – should work together in promoting it and filling it with life.

1T9K1978-KopieThe author is president of the Frankfurt School of Finance & Mana­­­gement. He stu­­d­ied economics, business edu­­ca­tion and political sciences. Steffens was a lecturer at the University of Applied Sci­­ences Wil­­helmshaven and ma­­na­­ged development projects in Togo and Ca­­­meroon. Along with other positions, he is president of the Frankfurt Institut für Risiko­manage­ment und Re­­gu­­lierung (FIRM).