Changing City standards
From Mr Stanislas M. Yassukovich, CBE Sir: Peter Oborne roll-call of City cowardice', 26 May) seems to suggest that the City institutions which unceremoniously dumped Huntingdon Life Sciences owed some degree of loyalty to their corporate client. While physical fear of terrorist action may have played some part, the fact is that the relationship between City banks and the corporate world has undergone a profound change. Companies are regarded as commercial counter parties, not as valued clients in the old sense of the term. If their risk-profile changes, for whatever reason, links are severed as quickly as possible. With the massive consolidation of recent years, market shares are pretty well fixed. The best way for financial institutions to achieve the short-term profit gains demanded by the market and driven by compensation practices is to improve productivity and develop higher-margin products. Long-term client relationship-building is an inefficient use of resources. In any case, the banks argue, the companies change bankers like shirts — for a few basis points advantage or because their relationship manager (still so called) has moved to another place. With the lure of sign-on bonuses, this can happen twice in the same year.
When reputation had premium value in the banking world, client relationships were nurtured, and if the client survived troubled times it was eternally grateful and other clients were impressed. Today, shareholders are not impressed if a bank suffers loss or serious inconvenience in standing by a client. Mr Oborne also seems to believe that client confidentiality remains a settled principle. He would be surprised how much information can be secured about him from his own bank. The wonder is that there remains so much faith in the existence of City traditions (such as 'my word is my bond') when these have long gone. But then, a great many people still believe that bowlers are worn in the City.
Stanislas M. Yassukovich
Bonnieux, France
From Mr Douglas Shaw Sir: Bravo, Peter Oborne! The question is, what can one do to make a difference?
Put yourselves in the shoes of Shac (Stop Huntingdon Animal Cruelty) — consumer activism but without the criminality.
Remove your business from those on the Roll-Call of Cowardice to Bank of New York, but let them know why. Many pharmaceutical companies and animal charities have done the same.
Buy Huntingdon's shares while you still can, as I have done recently. Do so because it is a vote against terrorism, not because they might go up.
An intriguing possibility is for the City to engineer a capital-raising exercise for Huntingdon in a late attempt to recover its lost credibility. It would be encouraging to think that City institutions would, en masse, put their name to a public nominal placing or bond issue so that we might know that they value the rule of law.
Their craven behaviour so far does not encourage me to hold my breath.
Douglas Shaw
London SW7
Previous page
