CITY AND SUBURBAN
The last of the vast head offices now pick it up and shake it
CHRISTOPHER FILDES
Iurge James Wolfensohn to have the World Bank moved to Sydney. He is its new chairman, he was born there, it would give me an excuse to go there, the bank would be closer to its customers than it can ever be in downtown Washington, and nothing beats a move for shaking up a well- entrenched bureaucracy. Ten thousand souls (or bodies) now inhabit its expansive and expanding premises. They make it a period piece — the last of the vast old-fash- ioned head offices with a department for everything. The bank, too, is something of a period piece, left over from the days when developing countries had to turn to it for their finance. (It liked them to have plans for dams.) Nowadays they finance themselves in the market, with the help of international investment bankers, like Mr Wolfensohn. In the City of the 1970s he was in line for the top job at Schroder Wagg, until the old guard at Schroders lost their nerve and chose a courtly Scottish earl. That was a mistake. (Earls do seem to have trouble running merchant banks.) Mr Wolfensohn set up his own shop in New York, but was a candidate for the World Bank job 14 years ago. The appointment is, by convention, in the Americans' gift, and in that time it has gone to two retired com- mercial bankers and one well-meaning Congressman who must have been owed a favour. What the bank now needs is some- one with the energy to change it and the skills to bring it closer to the market. Its winner has been the International Finance Corporation, its investment banking arm, which works with the private sector and has multiplied its business six times in a decade. I would like to see the IFC bid for its parent bank. The sparky Mr Wolfen- sohn is just the man to make it happen. It is true that he lacks experience of running large organisations, but the cure for that is obvious: shrink the bank.
Friend of Bill A TREASURY friend of mine is on her way to Washington to work for the World Bank. She and I both realised that the pre- vious chairman (whose health has now failed him) might not complete his term. Who would the Clinton team pick to suc- ceed him? How would she enjoy, I asked her, working for a member of the Rose law partnership of Little Rock, Ark.? She seemed to flinch. In the event, she and the rest of us have come off lightly. We might have got Gerry Adams.
Ding dong merrily on high
I AM composing a regulatory carol, to be sung on suitable City occasions and spon- sored by the electricity companies. We all know the tune:
0 Littlechild of Birmingham, How still we see thee lie.. .
The carol tells of the regulator's deep and dreamless sleep, which did so much for the directors' bonuses and share options, and then of his sudden wakening, which knocks them sideways. In the unworldly quiet of his Midland university, the notion dawns upon Professor Littlechild that if all these chaps are making so much money out of electricity, he must have got his sums wrong. He spots this just as the Treasury is preparing to unload £4 billion worth of electrical shares. The Treasury consults him, the sale goes ahead and the news of his conversion follows. Already overdrawn on the embarrassment account, the Gov- ernment sees its credit take another lurch. Only in the boardroom of Northern Elec- tric can the professor look for friends. He has saved their jobs by saving Northern, at the last minute, from being taken over by Trafalgar House. Trafalgar now wants to pay less, but this needs either the Northern board's recommendation (fat chance) or a Littlechildish change of mind at the Takeover Panel. Or Northern's owners might even wake from their own deep and dreamless sleep, call a meeting and tell the board what they want it to do. That would win them a verse in my carol.
Straight up
THE MARTINI exchange rate, round about $1.60, is off the top but still repre- sents good value. I was checking on it in New York last month when Alan Greenspan of the Federal Reserve let the markets know that interest rates could go down as well as up. They took him to mean that that the exchange rate could go down as well as down. General turmoil followed. Eddie George (showing Mr Greenspan how to do it) says that the pound has been look- ing wobbly but he hopes that it will soon perk up. Martini fanciers hope so, too.
Questions in the air
`TO ASK the Chancellor of the Exchequer: On what principle did he refuse public money to the victims of Robert Maxwell's pension frauds, but provide it to pay bankers at Barings?' This question, I am told, hung in the air of Downing Street through Barings' long weekend, and Ken- neth Clarke could see it coming. The deci- sion to keep public funds out of Barings looks better by the day, and is admired, so Le Monde says, by bankers the world over. I find it distasteful (as. I was saying last week) to see the bonus-getters paid ahead of the bondholders and preference shareholders, who stand to lose much or all of their money. Now Nicholas Ritblat of British Land is putting an action group together, at BPNAG (Barings Perpetual Noteholders Action Group), S.J. Berwin and Co., 222 Grays Inn Road, London WC 1.
Don't call us
GWENDOLINE LAMB has been unusual- ly quiet lately, and now I know why. Hers seems to be one of seven names on the BBC's banned list, barred from its phone-in programmes as being too boring or too batty. From the BBC, that is a bit ripe. Described this week as the former 'Save Eldorado' campaigner, she is known to me as the unstoppable north-country voice on the telephone — the woman who lost money in a bust Manx bank and rings you up to tell you all about it. It can take the afternoon. She is to financial journalism what the Ancient Mariner was to wedding receptions. The BBC should give her a show of her own and let other callers take her on. (A Word in Edgeways?) Instead, it has given her a brand new cause of com- plaint. She will let them know.
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