I am a banker working in the bowels of the bank, i.e. Group Treasury where I performed the necessary function of liquidity, funding, capital and balance sheet management which is the unglamorous part of the bank. One can liken me to the banking equivalent of a plumber. In 2007, I had 10 reporting to me across the APAC region. Today I had 3 left due to reduction of balance sheet. In 2008, the bank sacked the management of our capital markets division in APAC and handed the business to me. 40 staff came under my responsibility, today there are none. I told my staff in those days that hundreds of thousands of bank employees will lose their jobs and most will never come back to the industry. This hold true even today.
The whole banking industry was infected by the investment banking and capital markets culture which were previously separated from normal commercial banking. Once the barriers came down, banks took excessive risks because suddenly capital markets had access to cheap retail funding, previously unavailable to these business. Transaction relationship and opportunistic banking triumphed over the old long term corporate relationship. Bonus was the rage with fierce competition for “talent” so much so banks had to go for high leverage ratios to achieve the profits to pay the vast bonuses.
Look at Barclays, the one bank that epitomizes all that is wrong about banking under its former CEO Bob Diamond. In its latest investor relation briefing, the bank revealed that it paid 2.9x more bonus than dividends. This tell you the bank is practically ran for the benefit of insiders than for shareholders and customers. In this culture, LIBOR manipulation, excessive trading (JPM’s London Whale debacle) were natural extension for the unscrupulous to pursue bonus at all costs.
The events since the Global Financial Crisis broke in the summer of 2007 has left me with a visceral detestation of these high flying bankers including those who worked in mine. They got their ransom and left before the shit really hit the fan. My colleagues and I in the bowels of the banks like similar people in other banks, worked day and night to repair the damage they left behind dealing with crisis after crisis. Our Chief Risk Officer collapsed from nervous breakdown and was never the same person. My Group Treasurer, a young man 8 years my junior, succumbed to exhaustion. I, myself, sometimes had trouble sleeping. So forgive me if I say all these without a hint of hypocrisy because I have none.
Armchair Anarchist