Page last updated at 07:40 GMT, Wednesday, 8 April 2009 08:40 UK

City Diaries: 8 April 2009

Man looking at a falling graph

These diaries are written by people who work in finance and have had a front row seat as their industry goes through the biggest changes in decades.

They give us regular insiders' updates on the mood in the City of London and the dramatic changes in the world of finance.

In this instalment, our diarists tell us how they perceived the G20 protests held in the City of London.


Laura (not her real name) works for a commercial bank in London.

Well, the G20 show has finished and left town and alongside the mess left by the protesters, we have some nice shiny statements which are going to apparently change the world. For financial services, there is the "threat" of a new regulatory regime to keep the genie in the bottle.

It will take decades worth of employee involvement in charity and voluntary work to even start to atone for the damage our industry has done

Keeping investment and retail banking ring-fenced would not be a bad start. This will increase protection to normal depositors and would push investing in riskier financial products and assets into the already regulated sphere of investment management - where, in theory, you can choose the level of risk you want to be exposed to through a fund.

However, as many of us have found out recently, putting your pension investment in the "low risk" pot isn't any guarantee that it won't tank along with everything else.

We bankers each spend a good few hours a month filling out compliance checks, watching boring videos on money laundering, and learning and relearning about a whole manner of regulatory rubbish.

The process has overtaken the purpose and this is the real reason that corporate governance has been found wanting in the crisis. It may not be a new regime that will fix the problem - rather, the regulators actually allowing common sense to enter the system and a change in focus. If a bank has to fill out 20 forms a week to meet basic requirements, their completion becomes the focus, rather than actually bothering to read the things.

Large companies are obsessed with meeting tick-box requirements for their annual reports, and on portraying themselves as progressive in their approach to corporate social responsibility.

For the banks, this is an even bigger joke - it will take decades worth of employee involvement in charity and voluntary work to even start to atone for the damage our industry has done to the countries we operate in.


Anthony (not his real name) works for an investment bank in the City

My daily commute into the City on Wednesday, 1 April was noticeably different. The train was unusually empty and my fellow commuters, despite their best efforts, still looked conspicuous dressed in their designer jeans and expensive trainers.
Photo: Anonymous
Workers stuck in offices watched protests outside the Bank of England

Seeing these rather feeble attempts at disguise, I was pleased that I had decided not to pander to the "bash-a-banker" fears and instead wore a jacket and trousers.

There were some traders who had decided to go to the complete opposite extreme and dress in bowler hats. This is typical of a trader's sense of humour and the bravado of City boys fuelled by testosterone.

I half expected to be met by a hooligan ready to hang me from a lamp post, but there was nothing untoward and if anything, the City was less frenetic than usual. Fortunately, my walk to the office did not take me past the Bank of England and so I was oblivious to the crowds beginning to build.

'Mood change'

One thing I want to stress to those who watched this on the BBC News channel is that as windows got smashed at the Royal Bank of Scotland, the rest of the City functioned perfectly normally. My office is less than five minutes from the scene where the trouble was and yet my only source of information was the television coverage. Everywhere else was calm. As I walked back to Liverpool Street at the end of the day, City people were outside the pubs having a quiet drink, enjoying the evening sunshine.

Photo: Tom Riddington
Police prepare for large crowds in the City

The fact that the trains were unusually empty suggests that the mentality of guys in the bowler hats might be out of step with the new younger City workers who want a quieter life. Maybe City bravado and the Masters of the Universe are things of the past.

The mood has definitely changed. The voices shouting on the trading floor are more subdued. It will be difficult for banks to make money in trading of any type, because one of the proposals in the Turner Report on finance is to sharply increase the amount of capital banks have to put up on their trading book.

Traders will be let go because they won't make any money relative to the cost of capital and may go back to being barrow boys and selling vegetables on Romford Market. That is probably not a bad thing.

The surprising thing about these two days is how Gordon Brown recovered from his whistle-stop trip to the Americas prior to the G20 summit and actually managed to do rather well at the summit itself. Markets were expecting that the G20 would not yield anything particularly useful and in the end rallied, because something was definitely achieved.

Gordon Brown
Gordon Brown at the G20

The increased financial support for the IMF is to be welcomed if only to ensure that the emerging economies such as Hungary are protected. Reforming of tax havens is not easy to resolve. If it was so easy, why are we turning to it now? This issue has existed since the beginning of time and no government has been able to do something.

If the experience in my office shows what is happening right across the City, then there is a mass outbreak of empty-desk syndrome. Modern City Offices have large floors and people sit at work stations in Orwellian rows. As people disappear, pockets of empty desks are breaking out across the whole floor until whole rows are empty. It is looking like a scene from the BBC drama Survivors, where we assume everybody is dead but there are no bodies.

Perhaps some of those people will reappear in the FSA or the Bank of England to address the appalling lack of skills the current regulator possesses. Maybe some will reappear as teachers. If some of the so-called City Rocket Scientists could teach real science to teenagers, then some good may come out of this sorry business after all.


Mark (not his real name) currently works for a stockbroker outside London.

There is a long tunnel in front of us, a very long tunnel, but ever so slightly, the first glimpses of light seem to be breaking through the darkness. Last week, the FTSE passed 4,000. There was also news that there had been a surprise rise in the average value of a house. They are just little rays of hope, but at least they are rays.
I think people would be better off getting their heads down and working hard rather than waste their time with protests

This good news was set with the backdrop of the G20 meeting and the trouble in the City that accompanied it. To be honest, it was not as bad as I had expected, with RBS seemingly taking the brunt of frustrations.

Credit where credit is due, most protesters, and there were thousands upon thousands, did just that: protest. It is just sad that a few had to tarnish it by breaking into RBS and clashing with the police. The police did a fantastic job and should be praised for the way they handled the situation.

I had to cancel various trips in the City and the meetings I was due to attend. It was an irritant and in my opinion, these protests achieved nothing - apart from costing an already desperate economy another £10m to police the protests. I am sure people will disagree with me, but when you have environmentalists trampling through the City, it hardly makes sense.

Is anything going to change because people bring the City to a standstill? Unlikely. There was a great poster that read "Capitalism does not work". Neither did Communism, so what exactly do you propose? I think people would be better off getting their heads down and working hard rather than wasting their time with protests.

Photo: Danny Webb
A picture of a 'dead' banker

The dead banker effigy was more than a little scary, even to a grown-up. In an electrical store with the televisions on Sky News, a little girl, probably six, hid behind her mother as the television - well, numerous televisions in the store - showed the effigy.

In the papers, someone was quoted saying that we should be concentrating on "real" jobs, not those in the banking sector. I just don't get this at all and people need to take a long hard look at themselves.

As a colleague remarked this week, the banks did not force people to take credit. It would seem that people want a scapegoat and the banks are perfect for this, but we all contributed to the disaster.

People seem to forget that the crisis - well, a lot of it - was due to those in the sub-prime sector that struggle to pay their mortgage. I am sure there are many people out there that fall into this category, but are we creating effigies of them?

This country needs to stick together if it wants to move forward and forget about blaming one sector. I also notice there were no effigies of those at the top of car production companies. I might have missed something, but are they not struggling as well?

Banks seem to be the root of all evil, but they lent to people. Therefore, are the people - the individuals on the street - not really the problem?

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