Multi-boutique approach

A bank or a fund is divided into different business areas, in the case of a bank often divided into three parts: private banking, investment banking and asset management. These business areas operate largely independently of each other. However, they are interconnected at various levels and therefore interact with each other. – In the case of a bank or a fund, several individual working groups (investment boutiques) are set up to act independently. These are each focused on very specific investment projects, often organized by – economic sectors, such as agriculture, mining, manufacturing, – industries, such as: food processing, electronics industry, – countries, or – a combination of these. – As a rule, the special teams of experts formed in this way have very extensive freedom of decision and can therefore act quickly on the market on their own responsibility (self-dependent). – However, the bank’s top management is ultimately liable for wrong decisions. Financial history knows many cases in which members of the board of directors had to take their leave because teams making their own decisions led the institution into a financial crisis. This is why the multi-boutique approach has so far become more common in funds, but less so in banks. – See bank size, Chinese Wall, decentralization principle, empowerment, subsidiarity principle.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/