Banking

It was at the Mansion House dinner last year that a City gent two seats away announced himself to be the custodian of one of London’s ‘dark pools’. The phrase sounded pleasingly Tolkienian but his first explanation — an electronic exchange in which large share transactions are completed in total privacy — dispelled the charm. My reaction was sharp enough to make the Downing Street spin-doctor between us fiddle nervously with his Twitter feed. If institutional investors can shift blocks of stock on the quiet, without moving public markets, what happens to the normal process of ‘price discovery’ between buyers and sellers? Surely small investors are being ripped off? Sounds

Do we really mean to kill investment banking, or are we trampling it by accident in a fit of righteous zeal? By ‘we’ I mean politicians, regulators and public opinion, and by ‘kill’ I mean rendering it unattractive or unviable for any shareholder-owned financial business except on the most limited scale — and as uncertain a career choice as, say, Liberal Democrat politics or freelance journalism. The announcement last week of a radical scaling back of Barclays’ trading and deal-making arm has stoked a debate that had been smouldering for some time; for background reading, I recommend recent articles by Philip Augar in the FT and Frances Coppola in Forbes.

A bouquet to Alison Kennedy, ‘governance and stewardship director’ at the Edinburgh-based pensions provider Standard Life, for leading the rebellion of Barclays shareholders against the bank’s decision to pay increased bonuses of £2.4 billion, far outstripping dividends to shareholders and despite a fall in profits. At last week’s AGM, 34 per cent of shareholders refused to endorse the board’s remuneration report after Kennedy declared herself ‘unconvinced’ that the bonus pot was ‘in the best interests of shareholders’ and warned of ‘negative repercussions on the bank’s reputation’. As if to prove the latter point, Barclays chairman Sir David Walker responded not by apologising but by expressing ‘irritation’ that Kennedy had spoken

Imagine if the BBC’s excitable commentators had been asked to cover the building of Sochi’s facilities, rather than the Winter Olympics themselves. ‘Yeesss!!’ Ed Leigh might have yelled, ‘That’s the 21st construction contract for the big lad from St Petersburg, Arkady Rotenberg. Seven point four billion dollars’ worth, a new Olympic record — more than the entire cost of the 2010 Vancouver Games! How cool is that for the 62-year-old who was Vladimir Putin’s boyhood judo partner? Up next, the $9.4 billion rail-and-highway link between Olympic sites: keep your eye on Russian Railways president Vladimir Yakunin, who used to be the President’s dacha neighbour…’ And so on through a roll

A reader likens me to Dr Pangloss, the quack philosopher in Voltaire’s Candide who insisted that ‘all is for the best in the best of all possible worlds’ even after he was reduced to a syphilitic beggar. It’s true that I tend to regard positive indicators — a 22-year high in the BDO index of business expectations, a CBI statement that ‘we’re starting to see the right kind of growth’ — as a pattern of recovery, rather than a mirage in a minefield. But rest assured I’m also on constant alert for ‘black swans’, those change-making events that (so we learned from a more modern thinker, Nassim Nicholas Taleb) come

I’ve always respected stationmasters, but that sentiment is not universally shared. A distinguished friend of mine across the Channel described François Hollande the other day as ‘un chef de gare, sans aucune dignité’ — and it’s not difficult to picture the little president, peaked cap awry, trousers unbuttoned, haplessly waving his whistle as the last train à grande vitesse departs for the Eurotunnel laden with talented compatriots who see no future in France. As modern socialist leaders go, Hollande is beginning to make Gordon Brown look statesmanlike. Nicknamed ‘Flanby’ after a cheap custard pudding, he has left decision-making to his ragbag of ministers and done nothing to steer France towards

The cautionary tale of the Co-operative Bank, its black hole and its naughty chairman has recently taught us that if a financial institution has the reputation of being dull, earnest and set in its ways, it probably isn’t. The collapse last year of Switzerland’s oldest private bank, Wegelin & Co — whose boss once claimed that being small and provincial made it ‘easy to avoid the deadly emotions of greed and fear’ — was another example. Attention now turns to Standard Chartered, an overseas commercial bank that has long had the reputation of sticking cautiously to the mode of business in which it has historic roots, notably in Asia, and

The naughty Reverend Flowers will be a comic footnote in the history of the financial crisis — but no more than that. In terms of making ministry relevant to modern congregations, you’ve got to take your hat off to a man of the cloth who knows his ‘Charlie’ from his ‘ket’ (for the uninitiated that’s a horse tranquilliser) and likes to unwind after a tough select committee hearing with a ‘two-day, drug-fuelled gay orgy’. But it must be obvious that neither the FSA nor his own colleagues thought him anything other than a figurehead when he emerged through the Co-operative hierarchy to become a director of the Co-op Bank in

The naughty Reverend Flowers will be a comic footnote in the history of the financial crisis — but no more than that. In terms of making ministry relevant to modern congregations, you’ve got to take your hat off to a man of the cloth who knows his ‘Charlie’ from his ‘ket’ (for the uninitiated that’s a horse tranquilliser) and likes to unwind after a tough select committee hearing with a ‘two-day, drug-fuelled gay orgy’. But it must be obvious that neither the FSA nor his own colleagues thought him anything other than a figurehead when he emerged through the Co-operative hierarchy to become a director of the Co-op Bank in

‘Satan seizes control of saintly bank’ would be a fair summary of much of the coverage of the deal that has rescued the crippled Co-operative Bank from oblivion, or ‘resolution’ as it is technically called. In order to avoid that fate, the parent Co-op Group has had to inject £462 million into the bank while accepting a reduction in its own equity stake to 30 per cent. Dominant among the holders of the other 70 per cent will be a group of hedge funds from New York and Los Angeles who may or may not represent the prince of darkness but are certainly looking for what Co-op Group chief Euan

In 1925 Winston Churchill, then Chancellor of the Exchequer, famously declared that he wished to see ‘finance less proud and industry more content’. In the light of the financial crisis, much the same refrain has been heard from policymakers and politicians over the past five years. How are we to avoid repeating the mistakes of the past? And how might the financial sector reinvent itself for the future? I wish to argue there are grounds for optimism. Out of the ashes of the financial crisis a new type of banking is emerging. Old business models are being rewritten and new entrants are driving change. Indeed, it’s possible that the financial