CITY AND SUBURBAN
A test case for Lloyd's of London, which still can't see what the matter is
CHRISTOPHER FILDES
Iwas heading for America when Lloyd's of London disclosed that it was parting with its head of regulation, Rosalind Gilmore. It had been a coup for Lloyd's when this powerful and independent regu- lator joined them as the year began, but now we were told (in her absence) that she would not stay beyond the year's end. I come back to find a test case for Lloyd's regulation. It concerns a syndicate whose underwriter was told by his employers to curb his activities. He preferred to resign, his employers declined to release him until some of his commitments on the syndi- cate's behalf had been unwound, he wanted to move out and take his old syndicate over, but this was an offer his employers could refuse. They reported him to Lloyd's, where I understand that an investigation is in progress. His employers may also be impli- cated. I also understand that he proposes to start a new managing agency, and that although Lloyd's regulatory board took no formal decision, it gave the impression, with- out waiting for the inquiry, of being minded to approve. The board might have consulted its newly-formed Expert Advisory Panel, but this case was apparently not within the panel's terms of reference. I do not seek to take sides between this underwriter and his employers. The issue is Lloyd's credibility, which needs all the help it can get (a Parlia- mentary committee has already recommend- ed that Lloyd's should lose its power to regu- late itself) and has not, on the face of it, been helped by its handling of this case. The pres- ence of a powerful and independent regula- tor was the best guarantee that Lloyd's could have. Now, though, this guarantee is being withdrawn — and well-intentioned people at the top of Lloyd's still cannot see what the matter is.
Credit in eclipse
IN NEW YORK, the Sibyl of Wall Street draws my attention to this week's total eclipse of the sun. It coincides with a new moon, and the conjunction portends signs and wonders in the market. There could be no more spectacular stellar implosion or deeper financial black hole than a default of the United States government. It is hard up against its borrowing limit, time is run- ning out, and its paymasters in Congress have yet to budge. This game of bluff has been played before now, without anybody getting hurt, but Congress is full of zealous freshmen who make their leader, Newt Gingrich, look pragmatic, and they may just' not know the rules of the game. It would be wrong to hope so, but I would love to see what happened next. President Zedillo of Mexico would gallop to the rescue, his sad- dle-bags bulging with pesos. He owes the Americans that and much more. The Inter- national Monetary Fund would bail out its biggest shareholder with its new and improved borrowing arrangements, leaning on us (yes, we signed for it) and on recently recruited countries like Thailand or Austria which unexpectedly prove to have money to spare. The Japanese would let the Federal Reserve off its rash offer to refinance their banks. Fort Knox would run a clearance sale. Oh, well, perhaps not — but I wish that our own profligate governments had paymasters who could and would tell them to stop.
Expletive deleted
THE AMERICAN banks, like ours, are revelling in a takeover party, but Bankers Trust is missing out. Its name proves to be a noun clause and not a verb clause. Once sober and dull, lauded for the transforma- tion that made it a home from home for deal-makers and rocket scientists, Bankers Trust is entangled in its own tapes as thor- oughly as Richard Nixon. They record one dealer's account of his approach to clients: `Lure people into that calm and then totally [expletive deleted] them.' Now its chairman and his chosen successor have gone, to be replaced by a Mr Clean from the Treasury This bears out my theory that when institu- tions in the grip of change get rid of the peo- ple who can remember what happened last time, it happens again. It also bears out the Chase Manhattan banker who, getting out of the lift at the wrong floor and finding that his bank had a Culture Change Department, realised that this must be curtains.
Sardine Class, please
ON THE red-eye flight home, I pine for an airline that will introduce Sardine Class. This revolutionary notion came to me in Seattle this year, when I was clambering over a Boeing 777 on the assembly line and realised that only half the aircraft was used to carry passengers — the top half. What about a double-decker aircraft, I suggest- ed? What about going downstairs to bed? We're thinking of it, said the men from Boeing. When they think it through, they will realise that their basic ergonomic error was to make their passengers sit down. In that cramped posture they take up an absurd amount of space. They should, of course, lie down — arranged in drawers or in tubes, as in the more functional type of Japanese hotel. British Airways now plans to lure its first-class passengers by allowing them to fly when horizontal, a privilege for which they will be asked to pay fortunes. In Sardine Class, every passenger would have this privilege. Some might even be willing to share a double tube. It will be objected that a sardine-type conformation would make it harder for passengers to see out of the windows. Few passengers are placed to see out of a modern aircraft, and those who can are unlikely to see anything more inter- esting than a stratospheric cloud-base. I would happily trade that for a soporific whisky and a comfortable mattress. Hurry up, Boeing, and give us Sardine Class.
The right of silence
WE HAVE much to learn from New York's taxi-drivers. (If you would like to go back and start that sentence again, please take your time.) They offer a rider's bill of rights, including the right to an incense-free cab and to freedom from chat-shows: 'a radio-free (silent) ride.' If only London's taxis, so regularly and mad- deningly polluted with broadcast fatuity, would follow their example! This week sees them contending with the gridlock effect produced by heads of state who find the United Nations' fiftieth birthday an excuse for a jaunt to the big city, expenses paid. 'It's worse than having the Pope here,' says a gruff voice from New York's sorely tried police: 'At least we knew that when he went to bed, he wouldn't want to go out again.'
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