For financial people of a certain age, there is only one guest on this series of Celebrity Big Brother to be interested in. Nick Leeson, the rogue trader who brought down Barings Bank and who was played by Ewan McGregor in the film based on his autobiography, will be entering the video-surveillance house for the next few weeks. Being unable to leave and having none-too-friendly observers monitor his every move for the online popularity contest will not be a wholly unfamiliar experience after the prison sentence he served in Singapore for accounting fraud. But is this the start of a trend - will we see other financial celebrities trying to rehabilitate their reputation by appearing on reality TV?
Kweku Adoboli, for example, formerly of UBS' Delta One desk before an unauthorised loss of nearly $5bn, would be a natural for Love Island. Not only does he have the looks for it, he’s great at the kind of earnest speeches almost-but-not-quite-admitting-fault which contestants on that show need to make in order to retain public sympathy after they’ve been caught smooching someone they shouldn’t have been. As his website says, “I will always reject the Rogue Trader label that I live with because every decision I made at UBS was in an effort to achieve the bank’s goals”. Take out the word “trader” and substitute UBS for the name of a starlet in a bikini and you're well on the way to becoming the nation's favourite.
The secret is to match the financial personality to the format. Take former RBS chief executive Fred Goodwin. Proud of his Scottish roots, notoriously hard worker, bit of a temper, known for presiding over extremely high pressure working environments - who wouldn't want to see him on “Hell’s Kitchen”, giving Gordon Ramsay a taste of his own cooking? The spinoff series “Fred Goodwin’s Banking Nightmares” could be an even bigger ratings draw than the original.
Bernard Madoff would be a perfect host for a reboot of “Who Wants To Be A Millionaire?”. He could justly claim to have made millionaires out of dozens of people. Admittedly most of them were multi millionaires before he met them, but even so. The format could even be combined with that of “Deal Or No Deal”, because few people are better suited than Bernie to a game based on a box that might contain a lot of money but might be empty, and where you have to persuade people not to look inside.
There are even whole banks that could be identified with a reality show format. In I'm A Celebrity, Get Me Out Of Here, contestants who have achieved fame and success in their previous careers are dropped into an hostile environment and forced to perform increasingly humiliating tasks in order to survive before eventually being put on a plane home. Several recent Deutsche Bank chief executives would recognise the experience. Or the Goldman Sachs partnership process, where people are taken away from their families for a period of months and forced to demonstrate their willingness to make sacrifices for a chance at the big time, before being arbitrarily told that they just don’t have the X Factor.
But the finance / reality crossover that we’d really like to see is one for which, in retrospect, one of the most famous quotes of the financial crisis could be seen as an audition. As Chuck Prince of Citigroup said, “as long as the music is playing, you've got to get up and dance”. Why should this only be regarded as a metaphor? We want to see Bruno Tonioli giving a top score and saying “sensational darling!” as the TARP is forgotten and Chuck jives across the floor to the sound of David Solomon’s dance remix of “Don’t Stop” by Fleetwood Mac.
In television terms, it’s currently all going a bit “season finale” at Deutsche, as a major decision approaches regarding the direction of their investment banking franchise. Garth Ritchie, CEO of the investment bank, comes up on the rolling calendar of Deutsche board contract renewals in October. Ritchie was considering leaving Deutsche in April, shortly before the management restructuring that brought Christian Sewing to the top job. Instead, Markus Schenk left and he became sole rather than co-head of the Corporate & Investment Banking division. Normally, you would think that that would have been the “back me or sack me” moment and the October renewal would be largely a formality. But given current conditions at Deutsche, and high overall turnover of senior staff, nothing can be taken for granted.
Mr Ritchie is a 22 year veteran of Deutsche's trading businesses, and Sewing has made public statements of commitment to the investment banking strategy. All logic suggests that he will be reappointed. But uncertainty undermines managers and contributes to speculation about possible successors or replacements. This sort of uncertainty at the top is often really bad for business, as time and energy goes into speculating about who might be in or out rather than doing the job. There are only so many “until then, business as usual” speeches that you can give; touch up might be better advised to resolve things one way or the other without waiting two months.
It appears that Goldman Sachs have bragging rights (if that's the right word) for the advisory mandate on Elon Musk’s deal to take Tesla private, with private equity firm Silver Lake Partners also mentioned by the CEO. Neither firm appears to be talking about terms of engagement, although Silver Lake said to Reuters that they were assisting without compensation and were not officially financial advisors. (Financial News)
Credit Suisse's “Project Momentum” appears to be taking their Wealth Management business in a different organisational direction from that of UBS – not merging geographical units to save costs, but splitting them up (from 4 key geographies to 7) to speed up decision making. Wealth Management businesses are usually in either a cost cutting cycle or a customer service improvement cycle, so it's not so out of the ordinary for two big players to be out of phase. (Bloomberg)
Given how their market cap has progressed, it's almost inevitable that Deutsche Bank and Commerzbank will be leaving some major equity indices in the near future. What might have been less predictable is that one of them will most likely be replaced by Wirecard, a fintech payments start up that now has a larger market capitalisation than either of the two German household names. (Bloomberg)
Lloyd Blankfein has been giving advice on how to build a career on Wall Street to interns at Goldman Sachs via a video Q&A (“Lessons From Lloyd”). Don't be too narrow and take lessons from history were the most important tips. He also said that he looks forward to “unconstrained tweeting” but this was more a retirement hobby than career advice (Quartz)
The FT rounds up its coverage of the “Welcome Week” fuss at INSEAD, noting that the whole thing has now had so much media coverage that the pranks and hoaxes will be impossible to pull off. (FT)
Three staff on the electronic trading team have left Bloomberg in London after a whistleblower report and an internal enquiry into handling of third party data (Financial News)
Some detail from one of the CFTC's “spoofing” cases (this one to do with COMEX), where the accused appear to be unwilling to roll over and take a plea bargain. At present the case is stuck in complicated legal arguments over discovery, as the defendants want to be able to take depositions from witnesses at the regulator and exchange, while asserting their own Fifth Amendment rights. It all looks slightly more combative then most cases involving regulators vs traders. (FinanceFeeds)
There’s no evidence (yet) that they invented financial services, but research on the Neanderthals continues to prove that they were surprisingly sophisticated and intelligent. As well as eating cooked food and using penicillin and pain killing plants for medicine, they had complex social arrangements and family groups. (New Scientist)
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