One day you’re an elder statesman, chairing top committees and pontificating on Question Time, and the next you’re out in the cold, reading terrible headlines about yourself in the newspapers you’re trying to sleep under on a park bench. Well, perhaps not as bad as that — but as it is for former foreign secretaries, so it is for overseas bankers.
Standard Chartered chief executive Peter Sands, I wrote in 2012, was ‘one of the few British bankers whose reputation has actually risen in recent years’; his bank was a ‘dull old dog’, but it was also steadily profitable and sensibly managed. Then came sanctions-busting scandal, unwise expansion, slipping profits and disgruntled shareholders. Now Sands is leaving in a boardroom cull that chairman Sir John Peace attempted to pass off as a routine ‘refresh’ — before revealing that he would also refresh himself by retiring next year.
Then there’s Stuart Gulliver, the safe pair of hands who led HSBC’s global banking arm through the financial crisis before being named chief executive in 2011. Now he’s had to explain why he was the beneficial owner of a Panamanian company that had a well-filled account with HSBC’s notorious Geneva branch — and investors are asking whether he and chairman Douglas Flint, with 55 years at HSBC between them, are the right men to run the bank. It’s a safe bet that, for the first time in HSBC history, their successors will be hired from outside.
Meanwhile, Sands’s successor, ex-JP -Morgan banker Bill Winters, is the regulators’ blue-eyed boy, following his role in the Independent Commission on Banking. The worst that can be said about Winters (of whom there is a vivid sketch as a young swaps trader in Fool’s Gold, Gillian Tett’s account of the origins of the 2008 meltdown) is that he was a pioneer of credit derivatives, the instruments Warren Buffett called ‘financial weapons of mass destruction’.
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