On May 23, 2008, the FSA notified Dresdner Kleinwort that it had been placed on its 'firm watch-list' due to the fragility of its business. This assessment set in motion a chain of events that culminated with yesterday's High Court judgment in which Commerzbank was found liable to pay retention bonuses promised to front and back office employees totalling approximately €50m.

One of the FSA's key concerns had been staff retention. In an attempt to avoid a mass exodus of key personnel, Dresdner Kleinwort promised that a guaranteed bonus pool of €400m would be distributed to those employees who stayed until the end of the year, to be allocated based on performance 'no matter what'. This assurance was given initially by chief executive, Dr Stefan Jentzsch (who always insisted that his declaration was intended to be contractually binding), in a 'town hall' meeting, then through intranet Q&As and by way of an 'information cascade' through senior management.