Page last updated at 00:18 GMT, Thursday, 20 November 2008

City Diaries

Man looking at a falling graph

The financial industry has been hit hard by the economic downturn. Its reputation has been damaged severely, and people working in the banking world are facing the biggest change in decades.

Our City Diaries are written by people who work in finance and have had a front row seat as banks failed or were bailed out by the government.

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


Tom (not his real name) works in an investment bank in the City of London.

I have had an insider's view of the City as banks have collapsed. Speculation mounts for weeks as traders speak to each other. The world at large picks up on this and the pressure becomes close to unbearable. You go into work knowing that you are working for an institution that is under siege. If you happen to have a backpack with your company's logo on it, your fellow tube passengers give you a look of real pity.

People move around in the City more than they do in other industries. Last year, a decent candidate could have had five or six job offers. Now, they would be lucky to have five interviews. As people leave a company in trouble, they are not replaced. The bulk of their work falls on their already overworked former colleagues - 7am until 11pm is common as a working day. These people are also working under the dark cloud of possible redundancy. The resulting atmosphere is awful, to put it mildly.

People are looking to senior management for answers. As managers come out of meetings, every facial expression is scrutinised for clues by their staff. Teams of people are summoned into meetings to be told that there is no news, the situation remains the same, that the media are hyping everything up and that things are OK. Other banks are in trouble, but not this bank. However, markets tell you differently.

As the weekend comes, everyone is aware that a deal for a rescue or a buy-out has to be struck over the weekend. If talks on rescuing your firm fail over the weekend, the word's media and therefore all the bankers, are aware of what is coming the next morning. As people in the city fear for their futures, there are tens of thousands of those who know exactly how they will be feeling. Unfortunately, that number of empathetic individuals continues to rise.


Caroline (not her real name) works in a High Street branch of a large UK bank.

I have worked for one of the big UK banks for more years than I care to remember. Most of that time I have enjoyed my work, I have made friends with my colleagues and hold a responsible and trusted position.

We became that the market was getting tougher, business harder to attract and shares falling. Our chief executive kept telling us we were in the strongest position and we could ride the storm so we felt reassured.

Then one morning a customer announced to us we were being taken over. We thought they must have misheard the news or got their facts wrong. There was still no confirmation from those above - until the next day. There could be thousands of job losses. You can imagine how upset and concerned we all were.

This unsettling situation seems to be on hold for the time being. We are working under the threat of redundancy and suffering abuse from stressed customers. I can understand the customers' frustration and worries but very few realise that actually most of the staff could be out of a job.


Daniel (not his real name) works for the London branch of an international investment bank.

When I walked into the office on Monday it became apparent just how much the credit crunch has begun to have an impact. As I walked through the trading floor most people were already at their desks but the atmosphere was rather eerie. No one was talking, the phones were not ringing and you could hear a pin drop.

As I approached my desk I did not even say the usual "Good Morning" or "How was your weekend?" People are so preoccupied these days with their own worries. There is nothing worse than a Monday morning to remind everyone just how stark the situation really is.

Everyone is busy observing their news terminals or the flat screens on the wall with BBC, Sky News and Bloomberg live. You can almost see people waiting for the next piece of bad news - another collapsed bank, another crashing stock. People are pessimistic but it has almost become exciting to predict which company or bank will be the next to go.

The past week has been an even worse reminder of what it means to be in banking during the credit crunch. I spent the morning and parts of the afternoon scanning documents which is far from my usual days of dealing with clients, originating new deals and taking care of our portfolio. Nevertheless as long as there is something to keep you busy then you can't really complain. After all, everyone is worried about who will be next to get fired.

People are buying lunch for £5 in the cafeteria rather then spending £20 on some Sushi or Dim Sum outside. People now have breakfast at home or even bring a packed lunch. The days of the one hour lunch are well and truly over.


Stephen (not his real name) has worked in the City of London for over a decade.

The over-riding question asked within the city and asked of us by others is "when will things return to normal?"

Most of the people asking this are younger or from abroad: they don't remember the City or the markets before these last two euphoric booms. They also don't remember that credit used not to be easy and they've never known hard times.

It seems that, as the baby boomers hit retirement age, two generations are having to learn that the reckless credit-fuelled booms of the last two decades were the anomaly. Their totems are still-unaffordable house prices, record consumer debt and a population unprepared for recession.

Mind you, a very senior contact cautions "even us old ones have never seen anything like this." This is most certainly history in the making.

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