As a baby, Moritz Erhardt was a bad sleeper. His father, Hans-Georg, remembers the day of his son's birth, 3 October 1991, as one of the happiest moments of his life, but when he and his wife, Ulrike, took their newborn home, they found it hard to get him to settle. Like his father, Moritz suffered from neurodermatitis, a condition that left his skin covered with itchy sores.

"There were some really hard nights," recalls Hans-Georg. "One of the things I remember was that when I tried to get Moritz to sleep, he was able to go to sleep with one eye open. I would sit by the side of the bed and he would look at me with one eye open, almost to see if I was still there." Did Moritz still have this ability as an adult? Hans-Georg gives a quiet shudder of laughter. "I don't believe so."

Even as a young man, Moritz's sleep patterns continued to be a cause of some concern to his family. Bright and handsome, Moritz had a tendency to work hard and to party with equal energy throughout high school and his first years at university. He had several short-term flings with girls and a large circle of friends. His father, a psychoanalyst and life coach, warned him about burning the candle at both ends but, like many young people, Moritz took parental advice with a large pinch of salt.

His studies certainly never suffered. After school, he turned down a place at the London School of Economics, choosing instead to study at the WHU-Otto Beisheim School of Management in Vallendar, Germany, because it was more affordable (his degree was partly funded by the state, partly by an alumni bursary). He attended the University of Michigan for a term as part of an exchange programme. At Vallendar, he had his eye on a career in management consultancy before possibly doing some charity work.

"He wasn't just interested in the money," says Hans-Georg, 52, in his first newspaper interview. "He wanted to do good in the world. I've been sorting through some of his things and I found a quote from Marilyn Monroe he'd made a note of which went, 'I don't want to make money, I just want to be wonderful.'"

Moritz wanted to get as much experience as he could. He started applying for internships in the world of corporate finance, completing placements at KPMG, Morgan Stanley and Deutsche Bank. In July this year, he moved to London from his home town of Staufen near the Swiss border to take part in a summer internship with Bank of America Merrill Lynch that would pay him £6,000. It was a highly competitive environment: Moritz had fought 1,500 other candidates to get one of two places in the investment banking division. The hours were brutal. Working through the night was almost a rite of passage.

In August, Moritz was nearing the end of his seven-week placement. He had shown himself to be so capable that the bank was preparing to offer him a full-time job as a £45,000 a year analyst after his graduation.

But Moritz was unaware of this. Keen to impress to the last, he worked three nights in a row. Over a 72-hour period, he got a taxi back from the office to his flat in Bethnal Green, east London, at around 5am each morning. He would then shower briefly before returning to his desk. This exhausting ritual is known in banking circles as the "magic roundabout" – so-called because the taxi driver will sometimes wait outside while an intern washes, puts on a fresh shirt and re-emerges blinking in the dawn light.

On Thursday 15 August, Moritz was caught on CCTV entering the Claredale House block of student flats, rented to hundreds of City interns during the summer. He never came out.

At work that day, his colleagues at first thought Moritz might have slept in. He was a popular member of the team and they were willing to cut him some slack. But then there was a meeting Moritz was scheduled to attend at 2pm and he didn't turn up. As the day wore on, there was a growing sense of unease. In the evening, a fellow intern raised the alarm. His body was discovered at around 8.30pm. Moritz was sprawled across the shower floor, the water still running. He was 21.

In Staufen, Moritz's parents were sleeping. At 6.30am, there was a knock on the door. They woke immediately. Ulrike went to answer and found two policemen outside. "She immediately knew what had happened," says Hans-Georg, "because she was already very worried."

In the days leading up to Moritz's death, his mother had noticed that he was often sending her emails at five or six in the morning. Her son had suffered "a small number of epileptic seizures" in the past and was on medication for the condition. Although the results of the postmortem are not yet known, Hans-Georg has his own theory about what might have happened. "The lack of sleep caused a seizure and I think that, first in his room, and then in the shower, he had a seizure and then maybe he drowned under the running water because he was unconscious."

When he speaks, it is with the hollow exhaustion of a father who has faced the unbearable, yet accepted that somehow it must be borne.

Moritz's family – his parents and younger sister, Annalena, 19 – flew to London the following week with the intention of saying a final goodbye. When they arrived, they were advised not to view his body. "They told us he had spent a long time under running water and that had changed him quite a bit," says Hans-Georg blankly.

The staff at Claredale House had made an effort to tidy up Moritz's room, packing up his belongings – watch, mobile phone, notebook, laptop. Left to his own devices, Moritz could be messy, so there was a particular sadness for Hans-Georg when he saw how neatly arranged everything was.

"It was terrible to see it so orderly," he says. "I broke down when I saw that because, on the one hand, I saw how nice they had made it and how nice it was for them to do that. On the other hand, it wasn't Moritz's room anymore."

In the weeks that followed, the family were paralysed by grief. The shock was immense. And yet, speaking to Hans-Georg barely a month after his eldest child died from what he believes was exhaustion, he displays an astonishing lack of rancour.

Bank of America Merrill Lynch has already announced a review into its working practices and Hans-Georg tells me that its staff could not have been more supportive in the aftermath of Moritz's death; that he does not blame them for not spotting the warning signs earlier; that if he were to feel anger, it would only be "with Moritz for not having taken care of himself".

He can imagine, he says, that part of what Moritz loved about the work was the intensity and the esprit de corps that developed during those long days and nights in the office. He compares it to the endorphin rush experienced by long-distance runners or mountaineers who push themselves to climb further without oxygen. The bank wasn't exploiting his son, he insists. Instead, Moritz "was exploiting himself".

But in such a frenetic labour market, where competition for jobs has become even more aggressive after the financial crisis and the subsequent spate of City redundancies, it is hard not to feel that such youthful ambition needs to be carefully monitored. An exceptionally driven 21-year-old, desperate to live up to his own high standards, would have done almost anything to succeed. He would, perhaps, have known that 61% of current graduates end up working for the company where they have been an intern. At 21, one has very little concept of one's own limits. And life at that age is surely about testing boundaries, not adhering to them.

The Bank of America Merrill Lynch building, Canary Wharf, London Photograph: Mo Peerbacus/Alamy

Does Hans-Georg feel more could be done to ensure that big corporations have a duty of care towards their employees? Is the long-hours internship culture due an overhaul?

"I think it's in Merrill Lynch's own interests to make sure that such things don't happen any more," he replies. "But the labour market has its own dynamics. In the context of globalisation, Merrill Lynch is just a small player and something needs to change. I do really hope the British government will now start revising working hours and employment laws. I think it's the government that has to pass the legislation. In Germany, everyone has the right to rest between shifts, from a trucker to a surgeon."

He points out that Moritz's 2012 internship with KPMG in Frankfurt was less taxing in terms of hours because of Germany's strict employment regulations: "I think he worked really hard there, but not so excessively [as he did in London]."

Moritz's untimely death threw light on the internship culture at some of the City's biggest financial institutions. There were stories about students being so tired they could barely speak, let alone meet a deadline. At Merrill Lynch, all-night working was a badge of honour – some interns showered in the in-house gym rather than going home. They were, it has been reported, expected to stay long after the senior bankers left, often doing the mundane tasks passed on by analysts – PowerPoint presentations, Excel spreadsheets and the like.

The investment banking division was known to be particularly tough. Four hours' sleep a night was deemed to be around average. "You have no life whatsoever," says one former intern. "If you go home at 11pm, it is said you are 'giving up'. You have no hope of a job offer."

One 21-year-old male intern with an investment bank was recently paid £8,000 for a three-month term of duty and during that time, while living at home, he spent only £200. "He was always working so he never had a chance to spend his money on anything," says a friend.

None of the interns I speak to wants to be named and most of them do not want to talk at all. Some of them are still shaken by Moritz's death. Others are fearful of endangering their future career prospects. Many of them want to make it clear that, despite the long hours, they enjoy their stints working around the clock in the heart of the City. And there are perks, too, many of which Moritz enjoyed: cocktail parties, dinners and company cars.

But with the benefit of hindsight, does Hans-Georg wish his son had made a different decision – that instead of flying to London to work himself into the ground in the hope of securing a job, Moritz had chosen instead to stay at home and enjoy the summer holiday with his family?

"No way," Hans-Georg says, eyes unblinking behind black-framed oval spectacles. "No. Because he enjoyed it so much."

Ulrike Erhardt describes her son as "a darling". He used to write her easy, fluent emails expressing his love with a rare candour. She has printed some of them out and saved them in a plastic folder, filled with her favourite memories. She shares them with me, apologising for finding it too upsetting to talk. One of the emails is dated 8 May 2011 and reads: "Mummy, I love you more than anything in the world. You're the greatest and most admirable person I will ever meet."

Hans-Georg says Moritz "spread sunlight" wherever he went. He had "an easy nonchalance" that defused tension. His two parents were unmarried when Ulrike became pregnant; as a result, Moritz and his younger sister took their mother's surname (not their father's of Dieterle). It was only after Moritz was born that the couple decided to marry. "He brought people together," says Hans-Georg. "Including his parents."

With terrible symmetry, his death has achieved the same thing. "We are even closer now than we were before," says Hans-Georg, who was overwhelmed by the many letters, phone calls and emails he received after Moritz's death. More than 500 people wanted to come to Moritz's funeral. In the end, his parents had to limit the number to 200.

"He had a brightness, a way of shining," says Hans-Georg, sipping on a glass of white wine in the bar of a hotel in Hamburg where we meet. He speaks to me through an interpreter, although his English is excellent and he can understand most of my questions without translation. Occasionally, when things get too hard to talk about, he excuses himself, puts on a leather jacket and goes outside to light a cigarette, cupping his hand to protect the flame from a chill wind blowing off the Elbe.

"Moritz had a lot of friends and, for instance, if there were people who were a little bit like outsiders, he was kind to them, he took care of them and helped them. It's hard to find the right words. I think charisma is one of the ones that comes to mind. He was ambitious but he was also playful… He was a very special person."

When I say that his family must have been proud of him, Hans-Georg nods. "Yes, I'm especially proud of how many people love him." He asks the interpreter to make sure I understand that he deliberately used the present tense.

His parents insist they never put particular pressure on him to succeed. Hans-Georg found it "almost scary" when his son would come back from school with yet another A-grade and says Moritz was independent and self-motivated from an early age. It is telling that his father had no idea of the stringent selection process his son had undergone to get his Bank of America placement. He only found out after Moritz died.

The WHU-Otto Beisheim school in Vallendar, Germany, where Moritz Erhardt studied after turning down a place at the LSE to save money. Photograph: WHU-Otto Beisheim School of Management

But Moritz, 6ft 2in tall and athletically built, was sporty too, enjoying tennis, squash and skiing. At the Faust-Gymnasium secondary school, his physics teacher, Winfried Sturm, remembered him as "always alert and very active and fully engaged in his interests, which were in politics, sports and business… It was my impression that everything he wanted to do, he did it 100% – that was very important to him".

In the school-leavers' yearbook, all the departing pupils were asked to complete the sentence "Life is… ". Moritz wrote: "Life is too short not to enjoy it."

A friend of the family believed Moritz had what it took to become chancellor of Germany one day. Hans-Georg's ambitions for him were more modest. He quotes the lyrics of the Cat Stevens song Father and Son, saying he would have liked to see Moritz "find a girl and settle down". Now he will never get the chance.

In the weeks after Moritz's sudden and shocking death, Hans-Georg has had time to mull things over. Sometimes, at night, he dreams of his son and an image will rise in his unconscious mind of Moritz standing by a door. He thinks about the last conversation they had, when he and Ulrike drove their son to the airport to catch his flight to London. There had been a trivial argument – something to do with luggage or packing, he can't remember. Hans-Georg had suffered from bouts of depression that summer and felt guilty about parting on a sour note.

"I hugged him to say goodbye and maybe it's only now looking back on it with everything that has happened, but I did have a strange feeling. Maybe it was worry, maybe it was different things. Maybe it was mixed up with the regrets I have about having had depression and not having been able to spend more time with him." He pauses. "But he was the person who was most understanding of it."

Hans-Georg never saw his son again. "In a way, Moritz brought me back to life [from depression]. When I heard the news about his death, I realised nothing more could happen. My wife wasn't able to do anything for those first days. For me, it was just about picking up the phone. I had to step in, to organise the pressing things."

The hardest thing for the family to deal with, he says now, was the media attention. Pictures of Moritz were cut and pasted from social networks and splashed across newspapers in the UK, Germany and America. One particular article on a German website prompted a stream of vitriolic comments from anonymous people saying they wished more bankers like Moritz had died, even comparing the 21-year-old to an SS officer for the joy he took in his work. It was claimed he modelled himself on Gordon Gekko, the character portrayed by Michael Douglas in the 1987 film Wall Street, whose mantra "Greed is good" embodied a certain kind of capitalist excess. A photograph of Moritz wearing a pinstripe shirt, red braces and slicked-back hair was produced by way of evidence.

"That was for a theme party," Hans-Georg says, shaking his head. "He had gone dressed as Gordon Gekko. It was a joke."

Again and again, Hans-Georg and Ulrike felt their son was misrepresented. A résumé he had written for the social network Seelio was quoted repeatedly. "I have grown up in a family that expected me, in whatever respect, to excel in life," Moritz wrote. "Therefore I have become highly competitive and ambitious in nature from early on. Over the last year, I have learned that complacency implies stagnancy."

Moritz went on to list his achievements – a junior tennis championship title, a youth leader of Angela Merkel's Christian Democratic Union and so on. But when I ask Hans-Georg about this, he smiles. "I think he was being ironic. They had to do a presentation on Seelio when he was at the University of Michigan and he put up this biography."

Moritz was good at tennis, Hans-Georg says, but his father cannot remember him winning a championship. He attended perhaps three meetings of the youth wing of the Christian Democrats, but that was as far as it went. Knowing this somehow highlights Moritz's naivety and vulnerability; never satisfied with his own achievement, he still felt the need to exaggerate without realising he was already impressive enough.

There is, then, a particularly acute kind of senselessness to Moritz's death: a young man in the prime of his life, anxious to prove himself and with so much to give. His family are still awaiting the results of the postmortem and the prolonged conjecture over the cause of Moritz's death has been painful.

"Now, I want to know," says Hans-Georg. As a parent who has faced the loss of a child, he tells me that one of the questions he has asked himself over the last month is: "Why him? Why not me?" He has no answer.

"But I remember reading about the catastrophe in Bangladesh [when a garment factory collapsed killing more than 1,000 people] and I saw the ruins and the diggers and there was an elderly woman who had a picture of her daughter in her hands. Her daughter was still under the rubble and I believe that's a different situation and an even worse one – the tragedy of not even being able to bury your child. I think, with all of the terrible things in the world, perhaps the circumstances are still bearable for us in comparison and I'm grateful for that."

It would have been Moritz Erhardt's 22rd birthday on Thursday. His family took a short cruise from Hamburg to Oslo and marked the date quietly in private. They needed to get away, to be alone with their memories. They wanted to remember Moritz as he was before he died: a bright, shining young man with his future stretching ahead of him like a sunlit expanse of sea.