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Credit crunch hits the expenses lunch
Robert Mendick, Chief Reporter22 Apr 2008
The credit crunch has hit City financiers where it hurts them most - in their expense accounts.
A crackdown on gourmet lunches, first-class travel and even trips to strip clubs has been announced by one of the world's largest investment banks.
From now on, employees at Deutsche Bank will largely have to take the Tube, restrict meals for two to under £100 - unless they have prior permission to go over budget - and even travel second class on short train journeys.
The expenses crunch is likely to be felt at other banks across the Square Mile.
Last month Goldman Sachs issued a memo saying it would only pay for taxis home after 10pm with staff encouraged to eat in the office canteen rather than claim expensive meals sent to their desks. The belt-tightening at Deutsche Bank follows a memo issued from its Frankfurt HQ and sent to all staff around the globe. It states:
• Tubes should be the norm for travelling across London.
• Taxis taken during a transport strike will only be repaid if permission is granted from a banker's line manager.
• Employees must travel second class on trains unless journeys take more than two hours.
• Lunch should cost no more than £52 per person - unless prior permission is obtained.
• Staff arriving in a country on an early morning flight will be denied expensive early morning check-ins and will shower and shave at the airport.
• No expenses will be paid for adult entertainment of any kind.
The directive, issued on the orders of Deutsche Bank chief executive Josef Ackermann, who is paid almost £ 10million a year, is growing evidence of the effect the crunch is having on banking finances and a new wave of puritanism spreading around the globe.
The clampdown may also have something to do with the recent hiring of a former Swiss army general Ulrich Zwygart as managing director and global head of learning and development.
The memo, leaked to the German news magazine Spiegel, states: "Deutsche Bank does not approve of any adult entertainments and such expenditures will not be reimbursed."
A Deutsche Bank insider said: "In the good old days you could pass off a trip to a knocking shop as a restaurant if the name wasn't too obvious. But we're in an uptight, locked down new puritanism now, not helped by subprime."
It is all a far cry from the heady days of excess when bankers at Barclays Capital could spend £44,000 on wine during a meal at Gordon Ramsay's Pétrus - the restaurant threw in the food for free - and financiers invented a new pastime of spraying bars with vintage champagne, rather than drinking it, to mimic Grand Prix drivers.
If ever evidence was needed the era of the Flaming Ferrari has been replaced by the Lurching Lada, the latest edict from Goldman Sachs, issued last month but little noticed, does just that.
The memo reveals the bank has extended the opening hours of its inhouse cafeterias to 9pm while prohibiting bankers from claiming on expensive meals ordered in.
The memo adds: "The maximum reimbursable amount for cafeteria meals has been adjusted to £10 to reflect the cost of a full meal within the firm's cafeteria.
"Cafeteria receipts will need to be retained."
Reader views (6)
Doubtless these changes will also be applied to MPs excessive expense claims? No, didn't think so.
- Nobby Clark, Perth, Scotland, 23/04/2008 11:37
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But Bean Brown said it is all just a slight dip in the economy!?
- Jacqueline, Hampstead, London, 22/04/2008 18:39
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Well its a nightmare I'll tell you! My £500 lunch and 2hours r&r in the sauna no longer paid for! It's a disgrace hopefully they'll employ more secretaries to make up for it!
- Billy Jones, City, London, 22/04/2008 17:18
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That's still some lunch at 52 quid a head. Paid for by us mugs, sorry customers.
- Michael Riley, London, 22/04/2008 16:07
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What a terrible shame, the poor little darlings, although I'm doubting it will stop them claiming for their jollys.
- Wayne King, Colchester, 22/04/2008 14:28
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Gosh what hardships they now have to put up with. Bearing in mind all these expenses are paid for out of ripping off customers it is about time the excesses of the city were curbed and hopefully the "credit crunch" might help to bring this about.
- Pete, Barry Wales, 22/04/2008 13:38
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