Bankers were once the champagne-swilling, Porsche-driving, red-braces-wearing, coke-snorting alpha dogs. Now they’re battered, bruised and desperate to keep their jobs. After the financial crisis, will life in the Square Mile ever be the same?
Q. What’s the difference between a cattle grid and a banker?
A. You slow down to drive over a cattle grid.
An ingot’s throw from the sepulchral majesty of London’s Royal Exchange and the imposing walls of the Bank of England, and I’m hovering at the edge of a dance floor on which the cream of the financial industry is throwing shapes to Usher and Pitbull’s “DJ Got Us Fallin’ In Love Again”. In case the name of the place – Abacus – isn’t indication enough of the clientele (why not Calculator? Or Spreadsheetz?), one of the walls is plastered with the pink pages of the Financial Times.
Around me are loosened silk ties and cufflinked shirts and pencil skirts and court shoes. The drinks menu includes something called a “Gold Blush Sharer”, a “shimmering martini of Eristoff vodka, Archers, apple and cranberry juices, finished with chilled Prosecco delivered to your table with sparkle in a large martini glass”, which costs £50.
I’m here on the advice of a friend of a friend, a banker, whom I have asked where I should go to find his kind in their natural habitat. “I don’t know how much stamina you’ve got for this article, but have you heard of a place called Abacus?” he says, innocently enough.
I want to talk to bankers about how their lifestyles have changed since corporate finance became the most publicly despised industry in the country and Abacus, he says, is considered the foremost nightclub in the City. OK, he admits, it’s actually more or less the only nightclub in the City: the kind of place you go for one last drink when you really should be on the last train home. But if I want to see the typical City boy living it up in 2012, this is where I need to be.
And here comes one now, limbs flailing in some kind of spasmodic samba, translucent patches spreading from the armpits of his unbuttoned shirt, his pupils doing their best to converge at the bridge of his nose. It hits me, a little too late, that as I stand here drink in hand, scoping the room, it may not be particularly obvious that I’m looking for a story, not a husband (or a customer). He slides along next to me on the white plastic banquette, puts his arm round my shoulders, proffers his business card, apologises in advance for breaking my heart because he has a girlfriend, and asks if he can kiss me. He cannot.
So far, so provincial nightclub (except for the business card, which I kept – any suspicious girlfriends do drop me a line). If I’ve come expecting grotesque displays of cash-splashing and debauchery I’m going to leave disappointed – and hopefully soon and alone. The most morally suspect thing I can see is the sofa blocking access to the disabled lift. The balding guy at the bar in the chalkstripe suit is flicking through a role of crumpled twenties, not mint fifties; the dance-floor is sticky with beer, not Chateau Lafite; no one is ordering a Gold Blush Sharer. (The unusual element, if there is one, is the aforementioned testosterone. Everyone is looking to get laid; one young man even strides up to the female friend I’ve brought along and forgoes an introductory handshake in favour of a double-handed boob honk.)
The City, as it has come to exist in the popular imagination, is not this. The City, as we like to think of it, is a place teeming with greed and excess. It is populated by high-flying Masters of the Universe like Tom Wolfe’s Sherman McCoy and Oliver Stone’s Gordon Gekko who relish the chance to exploit the ignorance and misfortune of others to fund their expensive wives and climate-controlled wine cellars and yacht collections.
The world of corporate finance is a hornet’s nest, a knot of vipers, a “jungle full of chest-pounding males,” as Michael Lewis described it in Liar’s Poker, his book about working as a bond trader for Salomon Brothers in the Eighties (where Wolfe also went to research Bonfire of the Vanities, though Lewis eschews Wolfe’s “Masters of the Universe” tag in favour of the somewhat less lyrical Big Swinging Dicks).
But that was then and this is now, 2012, the midst of a dreary, depressing economic crisis that has brought the country – no, Europe – no, the Western world – to its knees. Have the Masters of the Universe been cowed? Have the Big Swinging Dicks lost their sway? Has the fabled Eighties-style banker – the swaggering wide-boy with the red braces and the model girlfriend and the Porsche key swinging round his finger bundling out of Annabel’s – been replaced by these sweaty, drunken oiks getting tanked up on normally priced booze in glorified student night clubs? Is the old fashioned City boy gone for good?
- A summer party at a grand country house in 1989, the “golden days” of boob-honking City-boy hedonism
Euan Rellie is a handsome forty-something investment banker who, along with his wife the fashion journalist Lucy Sykes, is a regular in the upper echelons of the New York and London social scenes. Rellie is the acceptable face of investment banking; a man whose easy charm and good looks mean he’s as likely to be interviewed about his taste in shoes as he is about fluctuations in the Nikkei. He now runs Business Development Asia, an international boutique investment bank he set up in 1996, but he started his investment-banking career in 1990 at Schroder’s (now part of Citigroup). These were still, as he remembers them, “the golden days”.
“When I started my career it was a time of Thatcherism and Reaganism, big takeover deals were in the headlines every day. It was a roaring period of unbridled capitalism. I would work till 10 o’clock at night and then take a girlfriend to Le Caprice for dinner,” says Rellie.
“We knew there was excess and we knew we weren’t Boy Scouts; we knew we were doing something a little bit rakish and devil-may-care, and the industry was sometimes ethically questionable. But it was fun, because of the rewards, and I felt surrounded by ambitious, intellectual, high-calibre people.”
I spoke to other bankers too, all of them pseudonymously (unlike Rellie they were not the bosses, and at many banks talking to the media without going through the correct channels is strictly verboeten), who said they too were attracted to the City by the thrills of the working environment: “The challenges of the competition,” says Carl, a private equities fund manager in his late thirties, “and working with nice people… Actually ‘nice’ is not the word. Interesting people.”
The challenges, and of course the money. Ten years ago, one recruitment executive tells me, a new starter could reasonably expect to be earning “£500,000 by the time he was 26”.
These bankers too had witnessed scenes of decadence and braggadocio. Brian, in his early thirties, who also works in equities for the investment arm of a major bank, remembers bonus day in 2005, when a low-loader lorry carrying five Ferraris parked up outside the bank he then worked for, pre-ordered by colleagues who wanted to make it clear just how rich the pickings had been. Then there are the cases that made the headlines: the six investment bankers from Barclays Capital who, in 2001, spent £44,000 on wine on a night out at Gordon Ramsay’s Petrus (the restaurant rather graciously threw their dinner in for free).
How times have changed. These days prominent bankers are more likely to be seen wringing their hands in front of Treasury Select Committees than slapping their backs over a £12,000 bottle of 1947 Chateau Petrus Pomerol. “I suppose in retrospect it couldn’t really last forever,” admits Euan Rellie. “Now being a banker is less fashionable than being an accountant.” In fact, say some of the others, banking may not even be a career you want to admit to. “When I go get my hair cut, I lie about what I do,” says Brian. “I lie because it’s so boring getting the usual ‘It’s your fault the country’s in this much shit.’ I just make something up. I think I was a professional fly-fisherman this week.”
Al, a derivatives trader in his early twenties, says that he and his friends usually opt to be photographers or designers (though as a night draws on, and presumably the behaviour gets worse, they’ll sometimes become bankers at a rival institution).
Because of course bankers are now the nation’s favourite bogeymen, second only to playground-lurking paedophiles. Since the fall of Lehman Brothers in 2008, which gave us the first inklings of the rot riddling the system, bankers have found themselves on the receiving end of a tsunami of vitriol from politicians and the media who sensed, arguably, that it was a line that would play well with voters/readers. Many newspapers seemed to take pleasure seeing which could raise its burning pitchforks the highest.
On 16 September 2008, Max Hastings in the Daily Mail decried the investment bankers, hedge fund managers and private equity bosses who “strutted in their huge townhouses, tossed away thousands at charity auctions, held court at polo matches and racecourses, launched fleets of yachts and squadrons of Lear jets in a fashion which many of history’s dictators would have envied.”
On 18 September, Brian Reade in the Daily Mirror encouraged his readers to “enjoy the bankers’ humiliation and give them a passing kick as they lie in the gutter with their battered reputations.” On 29 September 2008, Becky, 24, from London, stripped off for The Sun’s “News in briefs” page to demonstrate how she was “disgusted that Barclays bankers guzzled champagne in Monte Carlo as ordinary Brits struggle with the credit crunch”.
The abuse, say the bankers, is understandable, if tedious. “I’m not outraged by it because you’re paid pretty well for working in the City, therefore you can’t be too precious when there’s a bit of politics of envy,” says Carl. “Mistakes are made and it’s cost the Government a lot of money – so it’s cost everyone a lot of money – so you can see why there’s a bitterness out there.”
For Brian, the injustice is more keenly felt. “We’re all painted with the same brush: ‘You work in the financial services industry.’ Actually, 99 per cent of the people aren’t taking those risks and weren’t to blame for what happened.”
And yet, the punishment is being meted out. Brian left a previous job at an investment bank in 2008 after he brought in £90m of business, a personal record for him, only to be told that management would not be getting bonuses. “We literally worked our bollocks off, being told all the way that we would be rewarded, and then we either got no bonus or got paid deferred stock which ended up being clawed back,” he says.
However, even though bonus culture has all but evaporated, many banks have actually raised base salaries to compensate. “Financially it’s hit a bit,” says Carl, “but not catastrophically.” The effect is more one of atmosphere. “To be quite honest with you, says Dennis, who like Carl is also in his late thirties and in private equity fund management, “it had a big impact on how hard you worked. There was a lot more ruthlessness and personal competitiveness within teams beforehand, and there’s less of that now.”
If they allow themselves fewer indulgences, it’s as much a reflection of the sense of caution infecting the industry than any immediate financial jeopardy. Brian gives some amusingly rarefied examples of the cut-backs he and his friends have made: the ski-trip transfers now made in a minibus, not by helicopter; the friend whose wife has had to reduce the cleaner’s visits from once a day to twice a week; another who haggled with six different garages to get a good price for his Ferrari when he traded it in for an SUV, “whereas previously it would have been, ‘Here’s the keys, do what you want.’”
Where once a treat meant “a new car or a ridiculous holiday”, he says, it now might mean ordering a set of custom-made golf clubs.
The work-hard-play-hard mentality is there, the bankers say, but it’s more subdued. Carl says he can’t recall ever having taken cocaine in the City, no “get your credit card out” gatherings round a glass-topped coffee table (though he admits he knows others who have), while Brian insists, “The press image doesn’t exist; this isn’t the Eighties. People don’t live like that.”
Even the ebullient Euan Rellie agrees: “I think bankers are chastened a little bit. There’s less opulence. Less spraying champagne around at closing dinners. My friends certainly feel like it’s not really important to show off quite as much as some of us used to.”
-The infamous Flaming Ferraris with James Archer (centre) in 1998
But the champagne hasn’t dried up completely. Conversely, for some parts of the industry, showing off is exactly the order for the day. The City’s need to drum up new business – or give to existing customers the impression that everything is peachy – is greater than ever, so nights out schmoozing clients are an increasingly frequent requirement. How does that fit in with the bankers’ new chaste regime?
Simon English, City commentator for the Evening Standard, has a theory: they take it underground.
“This is anecdotal,” he tells me, over a couple of Cosmopolitans, “but it’s supposed to be the case that if you try and get a private room in an expensive London hotel, they’re booked up for months. The investment banks have got them, because that’s where they take clients to impress them. They don’t want to be seen out in public with a load of lairy bankers splashing out loads of cash, so they take a more private approach.”
For those who take it upon themselves to party while off duty, the risks are higher than ever. “I think people are being very careful about those unofficial nights out when you get trollied,” says English. “There have been memos sent out at big firms saying ‘Don’t embarrass us, don’t embarrass yourselves – we don’t want to see stories in diaries about a drunk banker attached to our firm spending £30,000 at a lap-dancing club.’”
On an earlier excursion to the Insurance Quarter of the City, two young credit analysts complained to me that Thomas Bruderman, the American trader who in 2003 got busted for having his $160,000 stag party – allegedly featuring ecstasy pills, female escorts and dwarf-tossing – paid for by clients, “ruined it everyone”. The ethos, it seems, is not so much don’t do it – but if you’re going to do it, don’t get caught.
Where once trading teams would seek out such publicity – like the “Flaming Ferraris” of the Nineties, the five flamboyant City traders including James Archer, son of Lord Archer, who took their name from their favourite Friday afternoon tipple and who hired a PR executive to build a reputation for themselves as a fast-living, big-spending brat pack – now sticking your head above the parapet is suicidal.
“Anyone doing a Flaming Ferrari thing now would basically be asking to be fired instantly,” said another anonymous City insider. “It’s a catastrophically stupid thing to do.” (They did of course get their comeuppance, and perhaps regretted their media exposure, when in 2001 three of the five were found guilty of trying to manipulate the Swedish stock market.)
The threat of unemployment is a very real one. According to the Centre for Economics and Business Research, 100,000 jobs in the City have been lost since 2007. Credit Suisse has announced plans to axe 3,500 positions by 2013, the same number is being cut by UBS, and HSBC has said it will shed 30,000 employees in that time. The worst thing you can do, it seems, is draw attention to yourself.
“When the market’s going up and everyone’s making a bomb, it’s easy to be laddish and roguish and no one cares,” says Simon English. “But now you’re probably not making much money, so when they decide who they’re going to sack, you don’t want to give them any reason for it to be you. If it’s known you were in late twice that week, or that you always go to the pub at lunchtime on Friday and sometimes you don’t come back, it’s a no-no.”
For most bankers, the Petrus dinners are done with; now they prefer to go to places like Brasserie Zedel in Piccadilly, where a salad and steak-frites is under £9. (And if Abacus is anything to go by, the nightlife is just as cut-price.)
It even affects the way people dress. Custom-made shoes and expensive silk ties have given way to off the-peg suits. One stock broker described in an email how the City has smartened up its act quite literally, to give the impression to both clients and bosses that they’re taking their work seriously: “Everyone is wearing a tie these days and the shirts are pristine – I’ve really noticed it recently. Nobody wants to be labelled as scruffy. It’s all part of the ‘dress for the job you want, not the job you have’ line. Problem is, the job you want is the job you have right now and you don’t want to lose it. Nobody wants to be seen as casual.”
It has all made the industry itself seem grey, less exciting, the bankers say. Incoming regulations on banking activities are creating hierarchical shifts within the banks themselves. “It used to be that trading would decide who runs the bank, now it’s the control functions,” says Brian. “Legal and compliance departments and the treasury functions are the most powerful.” It’s compliance departments that have killed off long-lunch culture in Britain, he says; the flashy spenders now are “the Eurotrash – the Scandis and Italians, they love it.”
In fact, says Simon English, the current downbeat attitude could be a particularly British phenomenon. “I think there is a collective sense of guilt amongst British people in the City about the financial crisis. There is a feeling of ‘We were at least partly culpable in this. It was us, a bit. There’s no point pretending it wasn’t. But people coming in from the Far East or America, they don’t give a fuck about that kind of thing. It’s hard for them to understand why London is so downbeat. Those guys are like, ‘Why are we being persecuted? We’re just making money. That’s what we do.’ (It’s a feeling typified by Jamie Dimon, head of JP Morgan, who recently responded to an interviewer from New York magazine who’d asked him about being an outspoken defender of his profession with: “It’s a free. Fucking. Country.”)
And to what extent does all this talk of abstemiousness and sobriety actually stack up, anyway? If we look around us we see that someone is eating in the flashy restaurants and buying the expensive houses and going on luxurious holidays. Surely it’s still bankers who can afford such extravagances?
“That’s true,” says Simon English, “but some of them are more on the margin than you might think. They live up to the hilt those guys, because that’s what their business is about. They aren’t going to say ‘I can afford a place that’s half a million quid comfortably.’ They’re going to say, ‘I’m going to get a place that’s a million quid and chance it.’ For some traders I know, everything they do in life is a gamble, a trade. The relationship they have with their wife is a trade; they’re constantly thinking about whether they’re getting a good deal or not. These are not nice people.”
Maybe the Big Swinging Dicks – or at least the guys who think the term has a nice ring to it – are still out there. English says he still knows traders who come back from lunch, “rip off their shirts and start trading with a bandana round their head,” and that the City is still “full of characters I’ve got to know who shouldn’t be managing anybody’s money.” But they’re less visible these days, and less likely to be at the major investment banks which are under the most scrutiny.
But could it be that these swaggering, posturing playboys are not even the ones with which we should really be concerning ourselves? According to one executive from a major City head-hunting firm, if you’re looking for the real Masters of the Universe, the ostentatious guys are the red herrings.
“The ones that get written up in the papers, the Flaming Ferraris, those idiots, the people who run up huge bar tabs, that’s always been a tiny, tiny fraction. They’re kids, basically. Jeffrey Archer’s son is a moron like his dad. But they’re never the people that matter. The people that matter are making a lot of money quietly and not attracting attention to themselves in a spivvy way. The serious money is not affected. Serious money is global, it is mobile, it arbitrages tax regimes. What you’re actually seeing is a consolidation of high-end capital amongst the super-rich.”
The head-hunter tells me if you want to know who the real players are, look to the boards of certain charities, the museum trustees, the philanthropists. But, he says, “the idea that these guys are actually purely philanthropic is bollocks – a lot of its getting claimed back on tax.” Euan Rellie describes how one billionaire friend took him aside and said, “I’ll let you into a secret: really rich people love a recession because we’re still rich and everything else is cheap.”
“That maybe gives you some insight into the predicament of bankers today,” says Rellie. “ Frankly speaking, the ones who’ve done really well over the last few years are fine. If you made money, as long as you haven’t spent it all, you’re OK. The restaurants aren’t full so you can book, you can rent private planes, you can buy yachts cheaply. It’s actually not a bad time to be really successful and rich.”
-City analyst-turned-newspaper columnist Geraint Anderson kicks back in Soho’s Sunset Strip club, November 2008
Life in the City is certainly a pale shadow of what it once was. But that’s not to say it has changed completely. It’s possible some of the fast-living, high-rolling, big-spending bankers have just learned to do it all on the down-low, away from the media glare. Perhaps the banks as a whole have learned a similar trick. Maybe the attention-seekers were always the outliers anyway, giving the rest of the 400,000 hard-working, well-intentioned men and women who work in the environs of the Square Mile and Canary Wharf – those like Brian and Carl and Al and Dennis – an undeserved bad name.
Or perhaps we’re looking for the wrong man: perhaps the Flash Harrys have always has been a useful decoy, drawing our attention and our ire away from the untouchable, unperturbable super-rich, leaving them free to float above it all, like gods on Mount Olympus, and go about their business.
Meanwhile, somewhere down below, in a crappy nightclub near the Bank of England as the clock strikes one, the beleaguered City boys sweat and grin and wave their arms in the strobe lights to the sounds of “Hot Stuff” by Donna Summer as the last train home pulls away from the station without them.
Report by Miranda Collinge
Photography by Dan Burn-Forti