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Interview on eFinancialCareers.co.uk

9/23/2013

Greetings one and all from secure undisclosed location.

I've been a tad busy recently, but did have a moment to give an interview to the site that has been in one way or another part of my career for as long as I have been a private banker: eFinancialCareers.

For me, being asked for an interview by eFinancialCareers is like having angels licking my soul (that's if I had a soul, I am a banker after all)

You can find the interview right here. If you are on Twitter I also recommend you follow the editor of eFiancialCareers Ms. Sarah Butcher.

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That's Not Very Nice. Not Nice at All.

9/16/2013

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Just a quick but spirited post today. I spotted this in the Telegraph City Diary today (thanks to @MollyAhmed for finding me the article).

The article in question was unfair and vindictive. Although normally a sort of live and let live, what’s for lunch and is there wine sort of fellow, I let things pass, but this one really made my English middle class blood boil. I was so miffed I had a mind to write a very stern letter to the editor. That would show them eh? But then I remembered I got this blog thingy going and it’s my own little universe and I can yell from my little pulpit here in my own corner of the blogosphere to my heart’s content. So here I go.

The article was about Nick Leeson and his comments about the world of finance. I was just getting into finance when the Barings bank thing exploded or imploded (however you want to see it) so I have always been fascinated by the story. As financial collapses go, due to the enormity of the collapse caused by Mr. Leeson’s actions, he became a household name as the biggest investment scandal of a generation captured the world’s attention.

I’m sure the journalist meant her comments to be funny, but then again a bully putting the head of a smaller weaker kid in a toilet bowl and flushing probably thinks it’s funny too… at the time.

The article implied that since Nick Leeson committed a crime, if his child got into finance then they’d be liable to commit one as well.

“Somebody call the Financial Conduct Authority – and fast.

But before FCA boss Martin Wheatley and his City cops open a new file labelled “Leeson”, be reassured that the man who manipulated Barings’ management accounts and the trade data feed – “ as heinous as it could get” – tells me his eldest child, a daughter aged 19, has no plans to follow in his footsteps.”

Mr. Leeson was convicted of a crime for which he has served his sentence. That should be the end of it. (He hasn’t exactly paid for his crime, obviously, as the bill was a few hundred million) But of course it wasn’t and never is with things as big as this. The Barings collapse was too big of a story. It became financial history, books were written a film was made, with Ewan McGregor starring no less.

Leeson has had to live with it and perhaps he has even turned it into a nice little earner on the after dinner speaking circuit. But make no mistake, what happened with Barings defined Leeson (for good or ill) for the rest of his life.

Unfortunately due to his (in)famous name his children will no doubt have had to bear a heavy burden throughout their lives. Children should not have to pay for the sins of their parents. Having his teenage daughter be the butt of a joke in a major newspaper is a cheap shot and deeply unfair. Leeson I’m sure can take it, but his daughter needn’t and shouldn’t have to. How could a 19 year old defend herself against a major newspaper? It’s no different to bullying. Having a laugh at the expense of the defenceless and innocent.

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Charisma, Interns, Magic Roundabouts and Military Tactics

9/9/2013

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Photo Credit: UK Ministry of Defence

Just this week I was discussing this with my colleague: Where has all the charisma gone from the business of investing? Everyone is so damn boring these days. When I came in to private banking (quite a while back and quite a few decades after the colleague I was discussing the matter with) there were still loads of people working in this business who were real characters. I’m talking about charisma.

This was a time, ladies and gentleman, when there were chaps who would came in to work one day and say “Lets start dealing in single malt whisky barrels.” And sure enough two hours later after a few phone calls they’d have signed off on a bunch of barrels from Scotland and be working the phones selling the stuff hither and yon all across this great planet of ours. Followed a few weeks later by a party to celebrate the selling of all the barrels. Celebrations crowned by taking delivery of one of the barrels for themselves and drinking it. Turned out it wasn’t very good, but hey, what an adventure and what a hangover. Good times had by all involved.

Try doing something like that today! It can’t be done. Legislation won't allow it. The world has changed, banking has changed. We’ve become boring, we have no ideas and we’re not allowed any ideas.

Investing is an ideas endeavor, it involves a certain creative process and of course risk. Sure you need to have an understanding of financial analysis and numbers, but you shouldn’t just be reading reports done by an analyst who is 21 years old and spent all his college days sending out applications to work for Goldman Sachs.

This brings me to one of the huge problems in the finance industry. Interns, no I don’t mean interns are a problem, it’s great we have them and it gives young up and comers a great chance to build their resumes and get a feel for the industry. BUT, but, but and it’s a big (_,_) Banks don’t teach them important skills. Interning at a big bank has become a form of military indoctrination designed to mold you into the kind of brainless non thinking machine that destroys your character and makes you a tool for the bank.

Just look at the tragic case of the Bank of America Merrill Lynch intern who died after apparently putting in 72 hours of work in one slog. Interns are nothing more than research assistants and excel jockeys. The purpose of putting them through ridiculous working hours day in day out, night after night is not to build professional capabilities, but to indoctrinate, it is just another form of hazing.

There is absolutely zero added value in making some youngster tap away at his excel charts for umpteenth hours a day. The amount of mistakes made is immense and all of their work needs rigorous checks and corrections. Anyone who has ever had to go through another person's excel analysis knows this. It’s a slow and laborious process to find the bugs and correct them. My point is this: Working them this hard requires additional resources, which costs the banks a bundle of money. So it is clear that the idea to work them this hard is not to improve their professional skills, it is to mold them into blindly loyal obedient minions in the world of finance.

Basic military training often involves excessive work and sleep deprivation. It’s a great tactic to build complicity and eliminate personality. Big bank internships are no different.

If you make humans into machines, you either end up braking the machine and/or creating an individual who is incapable of creative thinking in times of crises and new challenges. Problem solving involves creative thinking, destroying creative thinking leads to catastrophic crashes. The trend of conformity above all else in some of our most talented youngsters is destructive. Just look at the financial word during the past decade.

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The banker's umbrella

Interview on eFinancialCareers.co.uk

That's Not Very Nice. Not Nice at All.

Charisma, Interns, Magic Roundabouts and Military Tactics

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