Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

A case in point was the German bank Depfa. Founded in 1922 at the time of the Weimar Republic by the government of Prussia to make subsidized housing loans, Depfa moved to Dublin’s International Financial Services Center in 2002 to take advantage of Ireland’s welcoming tax laws. Depfa soon became known across the world as an adventurous financer of infrastructure, providing credits to the Spanish city of Jerez, giving financial advice to Athens and financing a conference center in Dublin and a toll road between Tijuana and San Diego. The Irish-German bank invested the retirement fund of the teachers of the state of Wisconsin, as well as funding Vancouver’s Golden Ears Bridge project. By the time of the crisis, Depfa’s total assets as reported by credit-rating agency Moody’s had swollen to $218 billion, one-third the size of Lehman.35 This astonishing expansion was not from Depfa’s own resources. It had precious few to begin with. Depfa grew like other market-driven modern banks.