March, 2009

Mar 09

Abba and regulation

The similarities may not jump out at you. But bear with me.

For years, I was only allowed to play the CD of Abba’s greatest hits when my husband was abroad. Now, Abba lovers have come out of the closet on the back of Meryl Streep’s performance in the film Mamma Mia! My, but it turned out there are many of us! By January, it was the biggest selling DVD of all time in the UK.

Regulation, too, has come out of the closet, on the back of an abysmal performance by a number of banks, egged on by loose credit. As far back as last March 2008 I wrote a piece for The Banker on the wave of regulation heading the way of the banks. It was picked up by the FT for its Op-Ed page but sunk without a trace.


Mar 09

A banking success story

I rarely notice a banker’s hair. Not even his (for top bankers are rarely women) lack of it. But it is virtually impossible not to notice the shock of white hair that covers the head of Peter Sands, group CEO of Standard Chartered. Mainly because the 46–year old’s thatch is as unruly as a child’s, not helped by his ruffling it at awkward moments during an interview about his bank.

My hands itched to take a comb to it, with a bit of the nit-deterrent spray that goes on my son’s hair every morning. (Nits are known as head lice in other bits of the world and schools have waves of them)

Mar 09

A call to arms?

The solution to the economic and regulatory crisis is simple. Reinstate compulsory military service. In 21st century fashion, make it for men and women. As many understandably won’t want to head off to Afghanistan and Iraq, they would qualify as pacifists and do an alternative, using their skills for the good of the country. That would take care of the rising unemployment statistics that so worry a government facing elections.

As part of this, former bankers could be trotted off to the FSA for 18 months to work for the equivalent of pocket money. This would ensure a continuous stream of capable bodies to fill the spaces for the 280-plus additional staff agreed in last April’s Supervisory Enhancement Programme. It would also be cheap. And it would create long-lasting ties between the regulators and those who would return to the private sector as bankers. Bankers should also be sent to the Bank of England as part of this military service.

Mar 09

Sasha the dog and saying sorry

What should an ideal head of risk at a financial services institution be like? Discussing this with a friend on the weekend – we are sad creatures – we agreed they need to thoroughly understand credit and they also need to have good political nous. But technocratic abilities tend not to be found along with people skills. The only viable option, we concluded, was to genetically engineer the new risk managers.

On a more serious note, the one certainty is that they should be on the board and count with the backing of the CEO.  Without the latter, the former is but a formality.