Morning:
8°c
We were sitting in Gordon Ramsay at Claridge's (I know, I know, it's part of the job and I wasn't paying) and the chat turned to office sex.
Andrew Moss, the chief executive of Aviva, had admitted to having an affair with a junior colleague who subsequently left the firm. There was much laughter at the story of another insurance boss who, when he heard that an insurance head was about to be outed in the media, hastily called his advisers together and confessed all, only to find that it was Moss's name in the spotlight and not his.
Then, the names of two FTSE 100 chiefs were mentioned as being rumoured for displaying as much prowess in the bedroom as they do in the boardroom.
Finally, one of our party, a former senior banker, said it wouldn't surprise him if there wasn't a captain of industry who hadn't had or wasn't having an affair. At this, there was a moment's silence. As we reflected on what he'd said, we glanced around. It was impossible to ignore the irony of being in a restaurant and hotel where, even as we spoke, illicit liaisons were surely taking place — that couple over there, they look as though they're up to no good, and as for those two in the corner, she's far too young to be his wife.
It's the sort of men they are, explained the ex-banker. In his experience, they're highly driven and competitive and used to getting their own way and that extended to their private lives. Their work, he said, didn't suffer and there was no question of them ever putting pleasure before business.
Which is why the response of some of the institutional shareholders to the Moss's revelation was nauseatingly sanctimonious. One shareholder said: “People are always concerned when there is a people-related issue at a very senior level within an organisation. History would tell you that it is destabilising. It needs to be sorted.” Another chipped in: “I think Lord Sharman [the Aviva chairman] is going to be under the cosh. This is not what you would expect from someone in Moss's position. This is Sharman's opportunity to stamp his authority on it.”
For the life of us we couldn't think of any high-profile business chief who had lost their job because they were having an affair with a colleague. There was Rupert Pennant-Rea, who quit as deputy governor of the Bank of England, but she was a journalist and besides, they did have sex on the carpet of the then governor's dressing room.
Then there was “five times a night” Sir Ralph Halpern, but his lover was a topless model, not an employee at Halpern's Burton Group and he only went later after poor company results.
In America, Harry Stonecipher was forced to resign as president and chief executive of Boeing over an affair with a company vice-president, Debra Peabody. But that was as much because he had issued a “zero tolerance” warning to employees about lapses in ethical standards and at the time US corporations were reeling from the Enron and Tyco frauds and wanting to be seen to be pursuing a new morality.
Here, there have been no big-ticket corporate departures. What that means in practice is that the boss stays while the junior staff member, invariably the woman, must leave.
That's the sadness of what is occurring (let alone the damage caused to spouses and children). And that is the real scandal.
Osborne is after votes rather than real reform of the banks
ANOTHER week, another policy dictat from George Osborne — and more bafflement and anger in the City.
A financial heavyweight said to me recently that he'd come to the conclusion that the shadow chancellor did not want to know how the economy and the Square Mile work, that merely giving the impression of knowing was enough. He said that before Osborne's latest pronouncements on bank bonuses.
Put simply, they don't stack up. He wants to clobber the UK retail banks, yet they were bit players in the causes of the banking crisis. Investment banks and hedge funds, he is leaving alone. That's because the UK High Street banks are a soft, easy target; going after the rest is much more difficult.
Osborne says that bonuses should be paid in shares not cash, yet the one bank that took pride in rewarding its staff with shares was a certain Lehman Brothers.
He's determined to pin the blame on bankers and their bonuses, but he pays no regard to the fact that the central banks set interest rates too low and a great tide of money was unleashed with disastrous consequences. None of this seems to concern him.
Osborne is about chasing votes and he's determined to exploit the public's rightful anger at the bonuses paid out by banks that relied on the taxpayer bailout, both here and in the US (and in that sense, all banks that pay their staff large sums are deserving of opprobrium because the banking system as a whole benefited from the rescue, even if they as individual firms did not directly do so).
To that end, what he's pursuing is headlines, regardless of a small print that does not bear analysis. While that may not matter in opposition, it will, when, dear God, he actually gets the job.
Wipe that grin off your face, Darling, you scare me
I'VE learnt a new word, I don't mind admitting. Grin-f****d. As in Hank Paulson saying, in Andrew Ross Sorkin's new book, Too Big to Fail: Inside the Battle to Save Wall Street, that the British had “grin-f****d” the US by blocking the plan to allow Barclays to take over Lehman.
It's an Americanism that means to be overly cheerful while being deliberately misleading. In Sorkin's riveting account, it arises when Paulson, the then US treasury secretary, believes the British will agree to the Barclays acquisition. But the UK authorities, in the shape of Alistair Darling, the Chancellor and Sir Callum McCarthy at the Financial Services Authority, are wary of the bank being unable to guarantee Lehman's risk and impregnating the UK economy.
Barclays would have needed Darling to waive legislation before it could secure the Lehman deal.
According to Sorkin, the Chancellor tells Paulson he does not want to “import [the US] cancer”. The UK Treasury is downplaying the claim. In particular it maintains Darling did not say those exact words.
I don't care. Whenever I look at Alistair Darling from now on I will think of grin-f****d. As in grin-f****d the UK.
