Polemics

74 Farcical Seconds

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Anyone with a taste for the absurd will delight in a video posted by the Financial Times on 16 May which can be found here. Just over a minute long, the sole speaker is one Colin Fan, who is – at least for now – joint head of Deutsche Bank’s investment banking division. In his 74 seconds a serious-faced Colin warns all Deutsche Bank investment bankers that “some of you are falling waaaaay short of our established standards. Let’s be clear. Our reputation is everything. Being boastful, indiscreet, and vulgar, is not OK. It will have serious consequences for your career. And, I have lost patience on this issue.”

Blimey.

And where precisely might be Deutsche’s reputation? This is the same bank that was fined €725.36 million last December by the European Commission after having been found guilty of colluding to rig two global interest rate benchmarks. The same bank that has set aside €2.5 billion to cover the costs of various ongoing legal actions it faces. Somewhat tarnished, one might think.

Young Colin’s video – he’s just 40 – opens a Pandora’s Box. Spruced-up and impeccably presented, Clean Colin is being groomed for Deutsche’s top job, as CEO: so he definitely needs to be seen to say the right things, if he wants to impress the regulatory authorities in the US and Europe.

But there are more grubby little flies crawling over each other in these brief 74 seconds than are found on the average corpse – the corpse of investment banking itself, perhaps. Let’s start with how the FT got hold of the video. There’s only one way – Deutsche fed the paper the video, which was supposedly an internal broadcast, aimed at the bank’s traders. So it’s a classic piece of PR manipulation. Give this firm statement of moral cleanliness and high expectations to the world’s leading business newspaper – that’ll show the world we mean business, right?

Within Deutsche itself Colin’s video evoked reactions ranging from hollow laughs and shoulder shrugs to cynical indifference. Some older hands reminded themselves that Colin’s route to almost the top included stints at Merrill Lynch and UBS, neither of which are primarily known for prioritising ethics over profit, or even placing them on equal status. UBS, let’s recall, agreed to pay $1.5 billion to US, UK and Swiss regulators in December 2012 for attempting to manipulate LIBOR. Back in June 2012 paid a $2.8 million fine – small beer indeed – for overcharging customers $32 million. Not that Colin was in any way connected with these matters; just that the rottenness is widespread. And there’s no greater evangelist than a convert.

Clean Colin warns one of his audiences, the internal one that is, that all their communications may be reviewed (although he stopped short of saying “and will be used against you”) meaning “emails, your conversations and your conduct”. But the daily life of investment bankers is chock-full of instant messaging and on-line chat rooms; it’s their lifeblood. It fends off the otherwise interminable boredom of sitting for hours in front of half-a-dozen screens. How a regulator can distinguish between a piece of harmless idle chatter and some five-star attempt at manipulation would challenge a medieval scholar versed in the art of determining the number of angles on a pin head.

There is, of course, a give-away in Clean Colin’s grave warning. It’s that single word “indiscreet”. His message is a variant of that old Second World War poster declaiming “Walls Have Ears!” He wants investment bankers to stop being big swinging dicks – that’s plain vulgar. He wants them to stop swanking about just how big their wallets are, because society has got it in for the obviously egregiously rich who don’t know when to put a sock in it. But above all, if they can’t control their behaviour then for goodness’ sake do it discreetly. If they must do deals that bear little ethical scrutiny then do not do them in ways that can be spotted. If you are stupid enough to be indiscreet then you’re out.

Earlier this week I listened to Sir Richard Lambert, former editor of the FT, give a talk in the House of Commons about his new baby, the Banking Standards Review. Sir Richard acknowledged that he has a big task ahead – changing the culture of banks will take, he considered, a generation or more. For the past forty years all those who have grown up within the ethically debased banking culture that surrounds us have become accustomed to its rapacity. How do you really change the core values of those people? Or must we wait for their generation to pass and just hope that the next will behave better? You don’t achieve that by 74 seconds of threat and bluster, even if it comes from someone who can kick you out.

A final marvellous twist to Clean Colin’s FT-exposed video is that the sponsor’s message was none other than a sales pitch for Martin Scorsese’s The Wolf of Wall Street. I like to think that my former FT colleagues intended that joke. And if they didn’t, standards really have dropped.


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