Bears at the picnic
FIVE years ago, when the merchant banks held their clearance sale, Warburgs and Kleinworts went for £1 billion and Barings for £1. I thought at the time that Barings might prove to be the most expensive. Now the Dutchmen who bought it after Nick Leeson had gutted it are putting it through a strategic review, which sounds to me like a shredder. They can borrow one from the new owners of Donaldson Lufkin Jenrette and pass it on to the new owners of J.P. Morgan. 'The next bear market,' so Philip Augar warns in The Death of Gentlemanly Capitalism, 'will be a real test for London.' The surviving banks, so he thinks, will fall back on their bases in New York (or Hol- land) and save on their costs overseas. The latest round of bonuses in six or seven fig- ures will remind them how expensive peo- ple in London now are. At Barings, the bear market has started.
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