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by John Anderson
Making new year’s resolutions for someone else is the height of conceit, vanity and presumptuousness – all characteristics that come easily to anyone who has been in the investment banking industry more than a week. So let us begin.
Deutsche Bank – resolve to be humble and straightforward. A baseball coach once told me you should be more humble in victory than defeat. If the great German juggernaut had taken that to heart pre-crisis, then it might not be in its current predicament. I realize it’s hard to get rid of the cultural sensibilities that accrued during its halcyon days, but things are different now and an acknowledgement that it is still feeling its way in getting the right model underneath it wouldn’t be a bad thing.
JPMorgan Chase – resolve to make room in the sandbox for others. Jamie Dimon deserves a great deal of credit for how he has manoeuvred this big ship through deep waters, but it would be implausible to believe that he has done it all by himself. Yet that’s the impression he seems to want onlookers to take. It’s an interesting study in psychology when you think of all the traits that it takes to run a successful, multi-faceted global organization like JPMC – intellect, strength, foresight, tact and so on. So how is it that someone with those skillsets is so thin-skinned when it comes to letting others on his team share some of the spotlight?
Barclays’ Investment Bank – it should resolve to be comfortable in its own skin. I can only imagine how it must feel to be inside the investment bank inside Barclays. Under Antony Jenkins, it lived through a cultural purge that took an abrupt U-turn when it dawned on someone they needed it to make money. Under new leadership, it was told it was going to be nurtured and the first manifestation of that was a big job reduction programme, on top of an existing job reduction programme. But as someone once observed: “It takes more than a wooden stake and silver bullets to kill a bulge bracket firm.”
Take heart
All that said, it should take heart that there is still a tremendous amount of firepower left in the franchise and since the retail bank is struggling under its own competitive pressures it is basically all that John McFarlane and Jes Staley have to rely on.
Santander – just needs to keep doing what it is doing. Watching this institution from afar is like viewing the final round of the World Series of Poker where there’s one quiet guy at the end of the table that just keep calling the bets and then swoops in on the last hand with a full house. From a PR perspective, the bank has been in a reserved mode as its retail operations in the UK take big bites out of the backs of the traditional high-street players. While it would appear its wholesale business is aimed at the SME market, in the UK at least, it should only be a matter of time before Bruce Carnegie-Brown’s presence on the board of directors prompts a run at the weightier portions of the investment banking markets.
Standard Chartered – stop drip-feeding us all the firings and forced dismissals and give us the whole picture. Every time I think of StanChart I’m reminded of a story I once heard about Blaupunkt, the German electronics manufacturer. After the war, Blaupunkt had to figure out a way to redevelop its military radio into something suitable for the public. Its engineers came up with a bright idea – they turned on the old military model and started pulling out parts until there was a diminishment in either the quality or volume of the radio signal. When they were done, half the parts lay on the workbench and the radio was still humming along. Twenty years ago, StanChart was a bit like a Blaupunkt radio – a perfectly-formed bank capable of making money in places that many of us couldn’t have found on a map. Today, there are still the remnants of the franchise in place, but hopefully there aren’t too many parts on the table to stop it playing music again.
To the entire global finance sector – return to your roots and take positive stock. However valid the steady drumbeat of cynicism and negativity that the industry has brought upon itself over the last seven years, it still does a great many beneficial things. When I started my career, back in the Neolithic age, you were constantly reminded that the efficient allocation of capital could bring prosperity where it hadn’t existed before; stability where it was desperately needed, and growth where there was only stagnation. If the industry is to keep attracting young talent that currently appears turned off by finance, it must do a better job of presenting itself as a positive agent for change.