The immediate reactions to the collapse of merger talks between Deutsche Bank and Dresdner were uncompromising. A senior lawyer in Frankfurt commented: 'The German banking industry should be hanging its head in shame.' Our favourite was the quip from a flamboyant hedge fund manager in Geneva who sent us an e-mail saying, 'this must be the greatest cock-up since the Romans arrived for tea and crumpets with those nice Sabine girls'.

Before the dust settles and German banking resumes its usual smug complacency, some action should be taken. The people who allowed this suicidal merger to reach the first stage should be held accountable. Their misreading of the market's reaction and the sapping effect on employee morale inside both banks suggests gross indifference or gross incompetence at the highest management level. More heads must roll. The chairman of Dresdner, Bernhard Walter, has already been made to walk the plank. Rolf Breuer, Deutsche's chairman, should also step aside and hand over the reins of the bank to Josef Ackermann.