Morning Coffee: Barclays' bankers weep at lavish lives of Bob Diamond and Rich Ricci. Bad news for bonuses
While Barclays' contemporary investment bankers wear hair shirts, its ex-investment bankers are still living in the style to which they became accustomed.
Rich Ricci, the most recently evicted head of Barclays' investment bank, is, for example, busy nurturing his race horses. "Champagne Fever [a horse belonging to Ricci] is bred to stay, so he will be run over longer distances this season," Ricci knowledgeably informed the Racing Post this week. He went on to drop in references to his many other steeds. Ricci has an, "embarrassment of riches," noted the Post.
While Ricci frequents the Cheltenham set, Bob Diamond, the charismatic American architect of Barclays' investment bank and former chief executive of Barclays Group, has been on the Mediterranean. There. he has been busy marrying off his 25 year-old daughter, Nell, in what the Daily Mail describes as a 'Three day wedding extravaganza in the South of France complete with two custom gowns and fireworks." Diamond hired 'Fait Accompli', the event firm behind the Royal Wedding evening party to manage his family event. The Mail suggested that Nell Diamond's two wedding gowns cost around $250k, suggesting the "money obviously hasn't run out" for 'Bobtimistic' Bob.
Barclays' current investment bankers, who are being made redundant at a rate of 45 people per day, can only look on and weep.
Separately, but on a similar note, Barclays' remaining bankers are likely to be disappointed with this year's bonuses, especially if the Bank of England has anything to do with it. The Bank noted yesterday that as banks' profit margins have fallen, bankers themselves have been benefiting at the expense of shareholders. Bankers always received more than shareholders, said Jon Cunliffe, the deputy governor for financial stability, but now they're getting more than ever. - Before the financial crisis, shareholders received 60 cents for every dollar that went to staff pay. Now they only get 25 cents. Cunliffe suggests banks rectify this by paying staff less in future. Bob and Rich may be the last of their kind.
European banks caused the financial crisis. They borrowed large amounts of US dollars through the money markets and invested them in US asset-backed securities via the US's shadow banking system. In effect, they acted as if they were US banks, but in Europe and therefore beyond the reach of US bank regulation. (Pieria)
Banks could end up with $41bn in fines to settle claims that they rigged FX markets. (Bloomberg)
Troy Rohrbaugh, the co-head of rates, foreign exchange, commodities and emerging markets at JPMorgan, says they are "150% committed" to pushing more fixed income trading onto electronic exchanges. This doesn't necessarily mean current traders will become obsolete. Some will remain - JPMorgan's electronic system Q.M.M needs one person to make sure the prices it delivers make sense and another person who takes the Q.M,M prices as a starting point for larger trades. (DealBook)
Just because the third quarter didn't go too badly, that doesn't mean banks aren't still keeping a strong rein on costs. (Wall Street Journal)
Citigroup just bought some of Deutsche's commodities book. (Fox)
How to stop people from wasting your time. (HBR)
Direct eye contact during a Chinese meeting is considered disrespectful, and other rules of Chinese business. (LSE Blogs)
Grumpy people are good at details. (NY Mag)
From 2016, new commuter trains into London will be standing only. (CityAm)