CITY AND SUBURBAN
Don't do something, just stand there, says the City's purist
The City is losing its best regulator just when it is embarking on its last chance, or another of its last chances, to regulate itself. Ian Fraser this week hangs up his hats as chairman of Lazards and of the Accepting House Committee. To City minds, though, he is still the man who set up the Takeover Panel, established its way of working — rapid, informal, profession- al, formidable — and made its writ run. `I'm proud of it,' he says. 'I think Hartley Shawcross and I were lucky at the time. It was a two-man affair — the senior states- man and the young engineer at the helm . . . .' Why, I ask, had the Panel worked better than its grander and later overlord, the Council for the Securities Industry? The panel had a specific task. The CSI had a roving commission — it couldn't find anything to bite on. As Harry Truman said: "Don't do something, just stand there."' Is there a moral in that for the latest overlord, the Securities Industry Board? `I'm sure they're aware of it.' He does not envy the regulators their task: 'Times are going to become more difficult. There are far more actors on the stage — people who don't come out of the English City culture. The culture clashes are visible for all to see.' He looks askance at a City where bankers and brokers move from place to place without warning, in little packs, half a dozen at a time: 'The breakdown of per- sonal loyalties seems to me astonishing.' Under Mr Fraser, Lazards of all the leading banks has regarded the City re- volution with the most counter- revolutionary eye. That reflects the man. In one sense he is a most untypical and original banker (plucked out of Reuters by Siegmund Warburg), in another a classical purist whose pessimism is fed by his sense of history. Banking, he says, goes in cycles, like insurance, or like airline business adding that beyond a certain point the airlines cannot afford to keep their planes safe: 'The quality of lending has gone down again recently. Margins don't contain enough to protect banks against misfor- tunes not of their own making.' Some advanced countries, to his mind, are gross- ly overborrowed and still borrowing on the finest terms: 'It's as if people can't read or have forgotten about Mexico.' A time, he says, for the copybook virtues of lend- ing short, and checking and re-checking credit limits: 'At the end of the day, I think it's antennae, you know. That's what I learned under Siegmund Warburg. If it smells a little bit fishy, don't do it. I don't think the other Ian Fraser. . . .' He consid- ers his namesake who used to run Johnson Matthey Bankers, and leaves the sentence unfinished. I suggest that some of these pennies are beginning to drop, and that his way of counter-revolutionary ideas is be- coming less unfashionable. Ian Fraser's face puckers. 'Oh, dear,' he says, 'I hope not.'