In the years leading up to 1986 it could be taken for granted that while
there were dishonest individuals spread around the City the institutions and
organisations were honest. Two decades later the position has reversed.
The City now has honest people but dishonest organisations. This is a
consequence of the change in culture.
Up until the Big Bang the City was built on relationships. It was the
defining thing about the place which gave it its pecking order. Among merchant
banks, the likes of Rothschild and Lazard had considerably more cachet than Hill
Samuel or Ansbacher. This was because their relationships were better.
On one side they were plugged into a better class of boardroom, so could
expect to get the big company business. On the other side they were plugged into
a better class of broker or investing institution, so could deliver the capital
that the client needed, when his business needed it.
The big change brought by the Big Bang was that the new arrivals had no
relationships so they had to compete on price and the quality of their ideas.
They had to hussle – indeed they had to sell – because they needed market share.
It took time but gradually it worked.
Business between the City and its clients gradually switched from being a
relationship driven culture to a transaction driven culture. Clients shopped
around and investment banks sold products. The priority became winning the
Twenty years ago the client came first. Today the City puts its own interests
first, the client is rarely better than a poor third.
Anthony Hilton is finance editor of the Evening Standard
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