The International Banker Spring 2014

The International BankerThe magazine of the Worshipful Company of International Bankers

News and Opinion for the Members of the Company

Featuring:How China sees the City? – p.6

The Worshipful Company of International Bankers 12 Austin Friars, London EC2N 2HE

Clerk: Nicholas WestgarthDirectline: 020 7374 0212 | Fax: 020 7374 0207 | Email: to [email protected]

Spring 2014

The Worshipful Company of International Bankers

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From the Editor

Member Subscriptions


Welcome to the Spring Edition of the International Banker. This is full of articles on global banking and other financial services which you will not read elsewhere. They aim to look under the surface of events and provoke thought. Some

highlights include how China sees the City, the City as a hub for Islamic finance, the responsibility of bank directors, non-traditional forms of insurance capital, the effect of tapering on emerging markets, the Lambert Consultation and many more. We have been blessed by having many distinguished contributors, both members and non-members, to this issue.

As important is the full rostrum of articles about the activities of the Company in its charitable and

numerous other activities. Members can see what is happening, and the many opportunities to join in them. And finally a City quiz – with a prize for the winner.

So this Edition will both interest you, and inspire you to see how the Company is making a difference in finance and in financial education. Only with your help, will these initiatives continue to flourish.

Finally the Editorial Panel who choose the articles, and the hard-working Editorial Team who and produce this Magazine, strongly encourage your feedback on this issue, and ideas and articles for the next (Autumn) edition. Please let me have these before June when we decide them.

Christopher Bond Editor [email protected]

Annual member subscriptions will rise to £295 with effect from 1 October 2014. This represents an annual increase of 1.2% since the last rise to £275 in 2008, covering principally salary cost increases of 3.5% p.a. over that same period. We very much hope that you continue to feel this is good value for money, reflecting the services provided by our team headed by the Clerk (including the new website), and the many events and activities they arrange. For those Members not paying by direct debit, we would very much encourage this to keep costs down. Further details will be circulated in the Summer.

We also encourage Members to move to regular quarterly donations to the Trust, again by direct debit. On average our 700+ members donate £164, for which we and our beneficiaries are extremely grateful. We would very much like to ask you to increase this to an amount equal to your subscription rate, via direct debits, in Nov, Feb, May and Aug: more on this in the Summer. For now, a simple – thank you.

Peter Estlin Chairman Finance Committee

Master Draft MagazineMaster Draft Magazine

The Editorial Panel

Geoff ArmstrongMark CazalyRos InnesMichael Llewelyn-JonesAli Miraj

Frank MoxonAlan RamsayKarina RobinsonAndre Villeneuve

The Editorial Team

Christopher Bond – EditorBernard Strange – Deputy EditorMark Cazaly – Deputy EditorAlex Rottenburg – Proof Reader


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Communicating with Members – Articles

The Soft Power of the City of London................. p.33

The Loving Cup .................................................. p.34

2013 Financial Accounts..................................... p.35

Events Committee .............................................. p.37

Business and Social Events ............................... p.38

Churchill War Rooms .......................................... p.39

The Clerk ............................................................ p.40

Associates’ activities ........................................... p.41

Company website ............................................... p.43

Contributors Sir Roger Gifford/Frank Moxon/Peter Estlin/Chetan Champaneri/Marianne Woods/Gaye Murdoch/Vincent Mercer/Nicholas Westgarth/Mark Cazaly/Ed Ellerington/Laura Whitehead

Sports – Articles

Golf ............................................................................p.44

Sailing .......................................................................p.45

Shooting ....................................................................p.45

Contributors Cliff Knowlden/Kerttu Kulasepp/ Michael Llewelyn-Jones

Light Relief – Articles

“My favourite Restaurant” ................................... p.46

City Quiz ............................................................. p.47

Poem .................................................................. p.49

Contributors Frank Moxon/Alan Ramsay/Max Asmelash/Christopher Bond/The Guildable Manor


Contents

From the Master ................................................. p.04

Looking Outwards – Articles

How China sees the City .................................... p.06

Islamic Finance and the City .............................. p.08

The Lambert Consultation .................................. p.09

Personal Responsibility of Bank Directors.......... p.10

The Fairbanking Awards ..................................... p.13

Remuneration and Employee Performance ....... p.14

QE tapering on Emerging Markets ..................... p.15

The Future of the London Stock Exchange ........ p.17

Non-traditional Insurance at Lloyds .................... p.18

EU Parliamentary Elections ................................ p.20

Prudential Regulation and Capital Markets ........ p.22

Money Remittance Business .............................. p.23

Bail-ins in practice .............................................. p.24

Contributors: Gerard Lyons/Samina Aktam/Jonathan Turner/Mark Seligman/Sir David Walker/Antony Elliott/Karina Robinson/Michael Llewelyn-Jones/Xavier Rolet/John Nelson/Anthony Belchambers/Jouni Aaltonen/Anwar Zaidi/David Clark

Charity and Education – Articles

Lombard Appeal ................................................. p.26

Mentoring............................................................ p.27

The charities we support .................................... p.28

Guildhall School of Music ................................... p.29

Essay Prize-giving .............................................. p.30

Contributors Frank Moxon/Diana Umbarila/Phil Pickard/Chetan Champaneri/Thomas Newman


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As the lone long distance swimmer approached a rocky outcrop on the Cornish coast, he heard an unexpected noise. The red emergency phone perched in the rocks above was ringing. Surprised and curious, the swimmer laboriously hauled himself out of the water and up to the phone. “Have you been mis-sold PPI?” asked the cheery voice on the other end. With a joke Martin Wheatley, Chief Executive of the FCA, characterised a scourge of modern life – the PPI claim cold call – in his thoughtful address at our Annual Banquet. He noted and supported our Lord George Principles for good business conduct, talking about the need for and development of a strong ethical culture in financial services, and the important link between performance and reward in the context of future proofing regulation and effective self-regulation.

My first six months as Master of the Company have passed very quickly. The excellent work done by the Committees has meant that we have made progress against all of the Company’s aims: a packed list of interesting activities from Events Committee and Gaye Murdoch, Associate activities and the various sporting sub-groups, all which have promoted fellowship; an impactful programme of charity and education led by that Committee; swimming with sharks which raised over £10,000 for the Lombard Appeal; and a refocus on promoting banking as a profession through culture and conduct at the Annual Dinner, and through meeting with the Lambert Commission. All of this activity has been underpinned by the tireless, and much appreciated, activity of our new

Clerk, Nicholas Westgarth.

Looking forward the Court has just approved preparation of an exciting new project – creating an oral history based on the personal recollections of Company members and liverymen who have been at the centre of events in financial services. This is an ambitious concept put together by

the History Committee under the leadership of Liveryman John Thirlwell which will make a unique contribution to the understanding of events.

The Company is in a unique position to make a contribution to both the City and financial services in a number of ways. As a modern Company representing such an important part of the economy, we can both contribute to the renewing of the Livery and to bringing some more traditional values into the financial services marketplace. Middle Warden Michael Llewellyn-Jones working with Geoff Armstrong of the Communications Committee, is leading work to develop a plan for the Company going forward to make sure that we do meet our aims of fellowship, charity, education, and promoting the profession of banking.

Finally, at the Banquet the Lord Mayor expressed an interest in hearing your case studies that she can use on her many trips abroad, as proof points of the dynamism, innovation and success of London as a financial services centre. Please send me your bullet points for input to the Lord Mayor’s Financial Services dossier via the clerk: [email protected]


From the Master


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Looking Outwards –Articles

How China sees the City and the City as a centre for RMB trading – Simon Hills spoke with Gerard Lyons, Boris Johnson’s Chief Economic Adviser, as London prepares to start clearing renminbi, about China’s relationship with the City and Europe p.06

What is the future of Islamic Finance in the UK? – Samina Akram, Company Freeman and Managing Director of Samak Consultants LLP, looks at the rapid growth of Islamic finance in London, and what happens next p.08

Dubai looks to build the leading global Islamic Finance hub within the Muslim World – Jonathan Turner, Liveryman, based in Dubai with RBS, describes how Dubai is approaching its Islamic finance role p.09

Meeting with the Lambert Committee on Banking Standards – Mark Seligman, Senior Warden, describes our discussions with the Lambert Committee p.10

What is the role of a bank’s board? – Sir David Walker, Chairman of Barclays and Company Member, talks to Chris Bannister*, about the role of Bank Directors p.11

The 2015 Fairbanking Mark Challenge – Antony Elliott, Chief Executive of The Fairbanking Foundation, describes how it is making a difference p.13

“The Road to Recovery” by Andrew Smithers – Karina Robinson, Chief Executive of Robinson Hambro, reviews the thought-provoking book by a contrarian author p.14

Should Emerging Markets fear Quantitative Easing (QE) tapering? – An extract from an interview with George Magnus* by Michael Llewelyn-Jones, the Middle Warden, on how tapering may impact Emerging Markets p.15

Xavier Rolet, Chief Executive Officer, London Stock Exchange Group, and Company Member – Talks to Daniel Yates about his vision for the LSE’s future p.17

Non-Traditional forms of insurance – John Nelson, Chairman of Lloyd’s Insurance, discusses the new sources of funding and the Market’s relationship with the new investors p.18

Why the European Elections are important to the City – Anthony Belchambers, Company Honorary Court Assistant and founder and recent CEO of the Futures and Options Association (and very active in Brussels), explains what the consequences may be p.20

Bank structural reforms and the European financial conundrum – Jouni Aaltonen, Company Freeman and Director Prudential Regulation, the Association for Financial Markets in Europe, looks at the link between capital markets and prudential regulation p.22

Home Remittances from the UK – Anwar Zaidi, Company Liveryman and Chief Executive Officer of Habib Bank UK, considers the future of Money Services Business p.23

Resolution, Recovery, Rescue: The Co-Op – exception and rule – David Clark, Company Freeman and Chairman of the Wholesale Market Brokers Association, looks at lessons from practical examples of bail-ins p.24


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How China Sees the City and the City as a centre for RMB TradingSimon Hills spoke with Gerard Lyons, Boris Johnson’s Chief Economic Adviser, as London prepares to start clearing renminbi, about China’s relationship with the City and Europe

Gerard I am guessing that whilst you were Chief Economist at Standard Chartered Bank you visited China more than once. How has your view of China’s relationship with the City changed?

I think I must have visited China around forty times now. It is clear to me that China’s relationship with the City has long been built on firm foundations which are getting stronger, with China viewing London both as the main financial centre in the European time zone and also as a bridgehead into mainland Europe. While this could suffer were the UK chose to become more distant from the EU, I don’t think it will.

How is the UK viewed by China – are there things we need to watch out for?

I spoke on a panel recently in Shanghai and I think we need to work hard to ensure that China sees the UK as a global leader in the 21st century. The feeling there was that the UK needed to emerge from images of its past: – some people in China thinking that the UK still works like a club overlaid with a degree of arrogance. Another issue in Shanghai was the sense that the UK’s infrastructure is outdated, which is why the Mayor and I are so pleased that China is investing in a number of infrastructure development products in and around London.


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So that is a positive view about the UK, what about Europe more generally?

Europe presents itself to China as the EU but once the Chinese delve more deeply they see it in a different light – a collection of different countries each of which is courting China as a whole, and its different regions, in their own way. And that contrasts with the much more homogenous relationship that China has with the United States.

Where do you think the Chinese want the balance of power in Europe – is it in Brussels?

I am not sure it is. Germany is very much viewed as Europe’s economic power. But the UK, and the City in particular is seen as the business centre for Europe so as China’s economy switches in the years ahead from strong unsustainable growth to slower but still strong sustainable growth, based on greater private consumption by China’s urban populations this will favour the City and the UK generally.

Wearing my day job hat as an Executive Director of the British Bankers Association I was delighted by the Chancellor’s recent announcement that the UK is open to business for branches, rather than subsidiaries of Chinese banks.

But actions speak louder than words, Chinese banks will pick and choose when and where they are going to establish themselves. China thinks very strategically but makes hard-nosed business decisions so I think it’s a great move that seeks to draw in Chinese banks to the City, rather than seeing them go elsewhere in Europe. Their planned Albert Docks investment could indeed establish a third centre for Asian banks in London, alongside the City and Canary Wharf

And of course the Bank of England’s decision to promote London as an offshore clearing centre for RMB FX trades can only help that. But are there any downsides?

Let’s not forget that Singapore – and others – are vying to be the number one offshore RMB clearing location too. We need to get this right from day one – there is only one chance to establish London as the western world’s centre of RMB trading.

What about going the other way – foreign banks and brokerage houses investing in China?

Any financial services firm contemplating opening up in China should engage with Shanghai’s Free Trade Zone. There is a clear list of the financial activities that are permitted which is likely to act as a blue print for other regions. As the economy grows it is not going to be practical for banks to run all their activities from Shanghai. Other Chinese mega cities have populations as big as some European countries, and to them there will be a lot of domestic issues to address – RMB trading probably won’t be top of the list.

How China Sees the City and the City as a centre for RMB Trading (cont.)

“Europe presents itself to China as the EU but once the Chinese delve more deeply they see it in a different light – a collection of different countries each of which is courting China as a whole”


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What is the future of Islamic Finance in the UK?Samina Akram, Company Freeman and Managing Director of Samak Consultants LLP, looks at the rapid growth of Islamic finance in London, and what happens next

According to TheCityUK’s 2013 report on Islamic finance Sharia assets have increased by a fifth in 2012, to a record $1,460bn. The industry is predicted to grow significantly in the coming years. At this current rate of growth the market could top $2 trillion in assets by the end of 2014. The industry is growing at an impressive rate of 15/20% annually. Ernst and Young estimates that the top 20 Islamic banks have been growing at an annualised 16% in each of the past 3 years far outperforming their conventional rivals. Whilst the financial crises from 2008 slowed down growth for the global economy, Islamic finance has picked up further speed; assets have in fact, doubled since the economic downturn. Business confidence has returned for the sector globally and especially here in the UK. The UK has been providing Islamic financial services for the past 30 years and was the first member of the EU to authorise Islamic banks. A report on the “Top 500 Islamic Financial Institutions” recognised the UK as the number one western destination for Islamic finance and in 8th position globally with Sharia-compliant assets of $19 billion in a global country-by-country ranking.

The British Government’s support and encouragement for Islamic finance has attracted business, capital and investment. British regulators have made it clear that companies providing Sharia-compliant financial services will be treated the same as those offering “Western” products – with the same expectations on prudence,

governance, ethical behaviour, capital adequacy and treatment of customers.

This was seen clearly at the recent World Islamic Economic Forum (WIEF) which took place last year for the first time outside of the Islamic world. London was chosen as the proud host. David Cameron, speaking at the event, in his keynote address made several commitments to further promote the UK as the key international centre for Islamic finance. The Prime Minister

announced Britain would become the first non-Muslim country to issue an Islamic bond worth around £200m and set out plans to establish a new Islamic index on the London Stock Exchange. This index will help investors comply with Sharia based principles; such as banning investing in alcohol, tobacco and gambling.A new task force ‘The Global Islamic Finance & Investment Group’ has been put together chaired by the Rt Hon Baroness Warsi. This group will bring together members from key Islamic finance centres, including senior figures such as Chief Executives and Central Bank Governors from Kuwait, Qatar, UAE and Malaysia. The group will meet on a regular basis with an aim to identify and tackle important factors related to driving the global Islamic finance sector for the next 5 years. All the above steps are hugely encouraging to further help establish London as the key Islamic finance centre of the world. The Prime Minister told the delegates “I don’t just want London to be a great capital of Islamic finance in the western world, I want London to stand alongside Dubai as one of the greatest capitals of Islamic finance anywhere in the world”.Jeremy Fern, Head of City Affairs at the City of London Corporation, believes that “London is well positioned to be a leading hub for Islamic finance. It offers reputation, dynamism, pools of expertise, international character and a consistent political will to encourage further growth. It merits a place among others centres, primarily in the Islamic world, at the heart of this fast-growing market”.

“I don’t just want London to be a great capital of Islamic finance in the western world, I want London to stand alongside Dubai as one of the greatest capitals of Islamic finance anywhere in the world”


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Dubai looks to build the leading global Islamic Finance hub within the Muslim WorldJonathan Turner, Liveryman, based in Dubai with RBS, describes how Dubai is approaching its Islamic finance role

In January 2013, Dubai’s ruler, H.H. Sheikh Mohammed bin Rashid al-Maktoum announced an initiative to build upon Dubai`s existing strong market position in Islamic Finance. This has seen many of the leading global banks locating their Islamic finance teams into the Dubai International Financial Centre, which has an ambition to become, within the next 3 years, the leading Islamic Finance hub in the world.

The Arabian Gulf and South East Asian countries have over the last 10 years been at the forefront of the development of the industry, with Dubai having successfully positioned itself as a leading Arabian Gulf financial centre for both conventional and Islamic Finance. Sukuk issuances dominated Gulf bonds and the overall sukuk market last year, with the $22 billion raised representing close to 50% of capital markets financing and leading the development of this growing asset class through market innovations in such areas as Tier 1 and Tier 2 Hybrid Capital Islamic instruments.

There are challenges facing the industry, which need to be overcome so as to continue this rapid growth. These include substantial differences in

the design and use of Sharia-compliant financial products between the Arabian Gulf and South East Asia. As part of achieving its target, Dubai has announced plans to set up a central Shariah board to supervise Islamic financial products to help develop a set of standards that will be internationally accepted.

Nevertheless, in addition to London, Dubai itself faces stiff competition in the Muslim world from the established centres. Malaysia, for example, is widely recognized as the pioneer having established a local currency Sukuk market and seeing the size of the market increasing 22.6 per cent year-on-year to MYR1.4 trillion ($460.4

billion) in 2012. Traditionally, Malaysia has been influential, reflecting its centralized model of regulation, which minimizes disputes among different boards of Islamic scholars. However, in much of the Middle East these regulations are viewed as too liberal and too closely mimicking conventional finance.

Much will depend on which financial centre(s) is able to establish “thought leadership” in Islamic Finance, creating the standards and structures accepted across regions and, ideally, across the global industry.

“...with Dubai having successfully positioned itself as a leading Arabian Gulf financial centre for both conventional and Islamic Finance”


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Banking standards matter. And no more so than to WCIB members.

So it was thanks to shared objectives that the call came through from Sir Richard Lambert’s office. His aim: to seek our input into his blueprint for improving banking standards.

Let’s back up a little. Last Autumn, the Chairmen of the UK’s six biggest banks announced that they had appointed Sir Richard to lead a new organisation. Its purpose – to improve the reputation of the banking industry by introducing new standards of conduct. So it was that on 20 January, the Master, the Clerk and I met Tom Sleigh and John Gall, both seconded to Sir Richard’s embryo organisation. Their aim was to hear what WCIB could suggest before their blueprint is published this Spring.

Naturally, the meeting started with a recital of the Lord George Principles for Good Business Conduct. The Clerk flourished a copy, the Master and I explained its importance. Without overstating matters, we told them how it is at the heart of what our 700 plus members believe. Sound principles underpin sound business. Taking the Oath on becoming a Freeman or a Liveryman underscores this, member by member. Sir Richard’s men nodded in agreement, their mission being to ensure that all bankers take a similar line.

Then we got to the heart of the matter. Sir Richard has to present his thoughts to his sponsors following a public consultation. What did we think

of some of their thoughts to date? So we listened, and commented. Would a Kite-mark work? Should it be for companies or individuals? How would it be run, and would it be practical? Could banks be benchmarked? Are there metrics for performance and behaviour that can be set? If you don’t reach the standards, what are the sanctions? Would these be different for foreign banks?

We mulled over the pros and cons. What has worked elsewhere, in the PLC world of corporate governance? Or at the Takeover Panel? Is this going to be a permanent organisation, or will it have a natural life-span? Who will it be accountable to? The conversation flowed, but then we noticed....... the offices were empty, darkness had fallen. Sir Richard’s blueprint was due shortly. We offered to give our further comments once the draft takes shape.

As the financial crash recedes, so a new sense of perspective emerges. We all want to improve the reputation of our industry. And for our part, we would like to see Sir Richard’s organisation play its role in this, with whatever help we can give. Lord George would have expected no less of us.


Meeting with the Lambert Committee on Banking StandardsMark Seligman, Senior Warden, describes our discussions with the Lambert Committee

The Editor adds – Sir Richard Lambert has since published his proposals in February. These recommend establishing a professional standards body for banking which would create a single code of conduct for all the 400,000 bank employees in the UK and separate standards for specific banking roles: these would be voluntary: banks will sign up on behalf of their staff and be responsible for sanctioning any breaches rather than the body: banks’ performance would be benchmarked against their peers. The code and standards would be based upon and supplement regulations. It would be funded by banks but operate independently of them. There are 19 questions on these ideas which Sir Richard has consulted upon. He hopes the new body can be up and start work before the end of this year. The consultation can be found at www.bankingstandardsreview.org.uk/

“Sound principles underpin sound business. Taking the Oath on becoming a Freeman or a Liveryman underscores this, member by member”


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What is the role of a bank’s board?Sir David Walker, Chairman of Barclays, talks to Chris Bannister*

1, Churchill Place is the Global Headquarters of Barclays plc. Its corporate values are writ large on each of the lift doors, greeting staff and visitors alike. The visible change of culture that is rolling through Barclays is striking, and this is being led by one of the country’s foremost banking figures. Sir David Walker is a globally renowned expert on Corporate Governance – among other achievements he produced the Walker Review in 2009 which led to extensive changes to the Corporate Governance Code and a new Stewardship Code.

Did Sir David think that empowering boards risked creating the moral hazard of bank CEOs consciously or unconsciously feeling less accountable given the increased level scrutiny and oversight from above? He was unequivocal that this is not so, recalling that during the Walker Review, a CEO questioned whether he

was eroding his role. Sir David fundamentally disagrees – “the CEO owns the beginning and end of strategy – the CEO’s role is to present strategic propositions: the board’s role is to consider these propositions and challenge in a thoughtful way: the role of chairman is to sum up the thoughts of the board and then fully empower the CEO at that point to execute strategy”.

A good board is only as good as the skills, knowledge and expertise of its members. No surprise then that our conversation soon moved

“...the CEO’s role is to present strategic propositions: the board’s role is to consider these propositions and challenge in a thoughtful way”

Sir David Walker, Chairman of Barclays


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What is the role of a bank’s board? (cont.)

onto the selection of NEDs, and how to make sure that the NEDs have the necessary understanding of the business. Sir David notes that even before induction and education of new board members, there are important steps to be taken: first, an assessment by the chairman of the Board Nominations Committee of the character of a prospective NED. Apart from the usual skills, a confidence and readiness to speak up is critical: secondly, the chairman of the Board Nominations Committee must be very clear from the outset of the expectations of the new NED, particularly that he or she will fully participate quickly. Induction and familiarisation then follow. This should be a combination of the formal (business specific and head office presentations) and of the informal (one-to-ones with executives), with regular refreshers an absolute must.

Board committees play an important role in “buttressing” the function of the board and providing a forum for a “deep dive” into the business. Board committees are crucial for enabling NEDs (who chair them) to really grip issues of risk appetite, and go effectively “into the heart of the business”.

Separately it is “critical that there is a direct line from the responsible executive to the chair of the committee”, an example being Chief Risk Officer to the Board Risk Committee. He notes that in the run up to the crisis, some banks didn’t have a specific Risk

Committee. In addition, the CRO should be articulate and focus on “3 or 4 big issues, presented thematically” for the Board rather than many issues presented in a wad of papers.

This led to the question of whether banking

expertise itself is essential on bank boards. Sir David’s view, perhaps surprisingly, is that it is not. While he believes a grasp for financial services is important, those that have previous experience outside the industry can complement the board with broader business experience. Barclays itself has two NEDs without financial services experience but they bring a “wealth of brand, reputational and technology experience with them” (the second is of growing importance, and not traditionally the preserve of ex-bankers). What is very important is the ability to judge and be perceptive of people. “Being able to pick a leader and someone with the capability to inspire, is not unique to someone who has had a career in financial services”. As I considered this point, and

reflected on recent history, he added “EQ versus IQ, if you like”.

It was appropriate to finish on such an interesting point. I decided as I strolled across the lobby of 1 Churchill Place, that, as Barclays navigates a period of great change, it certainly has a clear thinking and thoughtful Chairman.

*Member of the Company and General Manager of Westpac in the UK and US and holds three Non Executive Directorships.

“In addition, the CRO should be articulate and focus on

“3 or 4 big issues, presented thematically” for the Board

rather than many issues presented in a wad of papers”

Chris Bannister


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The 2015 Fairbanking Mark ChallengeAntony Elliott, Chief Executive of the Fairbanking Foundation, describes how it is making a difference

The Fairbanking Foundation is a registered charity, formed in 2008 following the commitment of funds required to conduct the initial research. The charity has a financial education purpose with a focus on encouraging the provision of financial products

that help people to better manage their money.

The original research was first published in 2009 jointly with the Centre for the Study of Financial Innovation (CSFI) as “Fair banking: the road to redemption for UK banks” and was published in 2013 as “Financial well-being components” in an academic journal, Social Research Indicators. It is the findings from this research into the benefits from having greater financial control which combined with other insights from behavioural economics have formed the bedrock of the specification for the Fairbanking Mark.

The Fairbanking Mark is the only accredited certification for financial products in the UK and has operated since

2010. The accreditation was obtained from the UK Accreditation Service in 2013 and the Fairbanking Foundation stands alongside other product certification bodies such as the BSI (the “kitemark”) and the Organic Foods Association. In a speech last November, the Lord Mayor, Fiona Woolf, described the accreditation as “an invaluable further step in Fairbanking’s positive impact on the UK’s retail banking sector”.

The Fairbanking Mark initiative grants three, four or five star Fairbanking Marks to products that, when tested by the Foundation and its research partner (Ipsos MORI), are shown to have features that

help improve customers’ financial well-being. Five products have so far gained a Mark: 2 three star Marks, 2 four star Marks and 1 five star Mark, across the Current Account and Savings Account categories. The Credit Card and Personal Loan categories have yet to have a product submitted for testing.

Although it is still early days, the fact that both large institutions such as NatWest and small institutions such as Thinkmoney, have created features with overwhelmingly positive reaction from customers, has led the Foundation to have greater ambitions. The aim is that in the next five years, millions of banking customers will be helped to make better decisions about their finances by keeping track of expenditure, saving sensibly for the future and using debt wisely.

The challenge for 2015 is to have at least 15 products in the UK with the Fairbanking Mark from a cross-section of banking providers. Credit unions, peer to peer lenders, building societies and retail banks can all participate in the challenge. This new certification may even have international opportunities with interest having already been shown in Europe. Following the banking crisis and its ongoing fallout, the banking industry needs every opportunity it can find to show that it can innovate in ways that unequivocally help its customers and the Fairbanking Mark could prove a pivotal initiative in encouraging this to happen.

“...the fact that both large institutions such as NatWest and small institutions such as Thinkmoney, have created features with overwhelmingly positive reaction from customers, has led the Foundation to have greater ambitions”

Thinkmoney’s Personal Account earned a 4 star Fairbanking Mark for helping customers manage their money better by increasing the control they have over their income and spending. For example a red “frown” face alerts customers to the potential to run out of money for regular bills; a typical reaction is to be “happy to be made aware of the problem before it becomes a major issue”; 94% took action.

®®®


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Chairing the Remuneration Committee (REMCO) of a listed company is a thankless task. Chairing a financial services REMCO is even more thankless. Chairing that of a bank, and a partly nationalised one at that, has got to be the worst job going. Yet so often some of the cleverest people on boards choose to take on this role. Once, moderating a panel on this subject, I asked what the attraction was. Intellectual challenge, was the response, and being at the core of one of the issues of our day.

Andrew Smithers, the head of his own investment consultancy firm and a unique thinker, is not afraid to tackle this head-on in his book. “The key aim for reform must be to align the interests of management with the economy as a whole…As we need more investment and lower profit margins, we should aim to make it in the interests of management that their companies spend heavily on new capital and keep prices down in order to win market share,” he writes.

If that seems impossible, he adds, we should at least try to reduce the current incentives that encourage less investment and wider margins. His solution is to tie bonuses to growth in output or investment, as well as having an element tied to profit. Output is defined as the sum of profits before depreciation, interest, and tax and employment costs. Additionally, there should be an agreement on best practice, which would allow for the

varying targets for companies in different industries.

Smithers is dismissive of the current trend for pushing out the period of compensation awards. As he rightly points out, the time horizon of the risks that the director will consider important has not changed. Pushing them out to five years just adds an element of considerable uncertainty to the rewards.

Meanwhile, in the real world, the compensation arena is full of a confusion of gladiators with arms drawn. The UK government is taking the European Commission to court for its compensation plans, which it believes will harm the City’s global competitiveness. HSBC is giving fixed pay

allowances to 665 of its employees who used to receive bonuses in order to avoid the EU’s planned bonus cap, which limits bankers’ bonuses to 100% of fixed pay, or 200% with shareholder approval. That means there is less of a downside that there would be if they were paid bonuses dependent on targets – as the bank will not be able to claw back allowances in the event of future setbacks – and HSBC’s chief executive has expressed his

displeasure at having to set this new system in place. Even the chief executive of the FCA has expressed his concerns about the priorities of the new system.

Chairs of REMCOs look set to continue dealing with controversy for the foreseeable future.

“The Road to Recovery” by Andrew SmithersKarina Robinson, Chief Executive of Robinson Hambro, reviews the thought-provoking book by a contrarian author

Karina Robinson


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Since the advent of the global financial crisis, the Federal Reserve Bank of the US (Fed) has used a policy of “quantitative easing” to try and stimulate economic growth, to the extent of over $4tn.

When in May 2013, the then Chairman of the Fed hinted that QE might be scaled back, some emerging market countries’ currencies saw sharp devaluations; conversely others appreciated on the assumption that this signalled an economic recovery in the US, and hence a likely increase in global trade.

It is important, by way of background, just to remember that the Fed is not exercising monetary restraint in the traditional sense, it is just reducing or tapering the amount of stimulus. So every month that goes by, the Fed is still buying more assets, merely at a diminishing rate. Assuming the Fed does complete its tapering this year, it does not mean interest rates will necessarily go up at that point, and in any event the Fed will continue to monitor the US economy for signs of weakness. Further, there has been no discussion about what happens when tapering ends, and there are all sorts of other issues that could enter into the sequencing of events at that point – a lot will

depend upon how the Fed judges the state of the US economy in the second half of this year.

Because the US dollar occupies a very special role as the global reserve currency, and the US Treasury bond market is the most liquid, deepest and broadest of all major capital markets, what happens in the Treasury market has immediate knock-on effects on Euro-denominated bonds, gilts, Japanese government bonds and so on. Willem Buiter made a very strong point in his recent piece in the Financial Times, that the Fed is not just the US Central Bank but the Global Central Bank; not that he was criticising the tapering decision per se – simply that it should co-ordinate better with its Emerging Market and other Central Bank peers.

Should Emerging Markets fear Quantitative Easing (QE) tapering? An extract from an interview with George Magnus* by Michael Llewelyn-Jones, the Middle Warden, on how tapering may impact Emerging Markets

“what happens in the Treasury market has immediate knock-on effects on Euro-denominated bonds, gilts, Japanese government bonds and so on”


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The emerging world is clearly quite different; people often make the connection with QE tapering as though there were nothing else happening in the emerging world, and that all of the problems that some of these countries have had recently are the fault of the Fed’s tapering decision. That said, there is no question that the Fed’s tapering decision has been a catalyst, which has resulted in the reversal of substantial flows of capital into those economies. This caused India, Indonesia, Brazil, Turkey and several other countries to raise interest rates in order to stabilize the outflow of capital, and to keep their exchange rates from falling too far too fast, which might otherwise cause inflation.

Since India’s new Central Bank Governor was appointed last year, there has been a welcome return of financial stability; what ails India is the serious problems around its attitude towards foreign investment and about its ability to implement infrastructure investment, particularly in power generation.

The Chinese are critical of what they regard as the US$-centric global monetary system. They would like, over time, the Yuan to be a more prominent currency in the world’s monetary system. But the tapering has not really had much effect on China

per se. China is a creditor country with a closed capital account. It would be vulnerable to capital outflows if Chinese residents were allowed to export capital at will, but they are not. The Chinese are therefore where they are: they run surpluses and accumulate foreign exchange reserves; they invest in US bonds, and have almost nowhere else to go. To the extent that tapering leads to changes in interest rates upwards or downwards in Treasury bonds, the Chinese are prices takers in this regard, and they have to accept this.

Finally, Mr Magnus believes that the Fed is acting wholly responsibly in gradually withdrawing the QE programme. Were it not to do so, it might actually be courting much bigger risks for itself and for financial stability in the future. So the main lesson we might want to draw

from this is that maybe the Fed’s communications strategy needs to be a little sharper, and be a little bit more sensitive to the conditions that other countries find themselves in; the underlying responsibility for sound economic management still lies with each country.

*George Magnus is a renowned author and economist and a senior advisor to UBS.

Should Emerging Markets fear Quantitative Easing (QE) tapering? (cont.)

“They would like, over time, the Yuan to be a more prominent currency in the world’s monetary system”


17

Xavier Rolet, Chief Executive Officer, London Stock Exchange Group, and Company Member, talks to Daniel Yates about his vision for the LSE’s future

There are 60 minutes of the trading day left as I walk in to Xavier Rolet’s office at the LSE. “It’s like an old lady!” Xavier declares, as he runs through a brief history of the Exchange, from the 17th Century to the present day. “And I have a lot of affection for her,” Xavier says, which may explain why he works seven days a week. He describes how the Exchange today, as it always has, provides entrepreneurs with an efficient way to raise low cost capital that doesn’t rely on debt.

The Columbia Business School MBA, who became CEO in 2009, is modest in describing why he thinks he got the top job. He puts it down to his understanding of technology and a wide range of products and markets, as well as his knowledge of risk management. Leadership is natural to Xavier, and he assumed this responsibility throughout his 25 year career at Goldman Sachs, Credit Suisse, Dresdner, and Lehman Brothers.

It’s clear that the financial crisis and its impact on ordinary citizens are still fresh in Xavier’s mind. He believes that equity markets are a part of the solution, helping to address the issue of the distribution of wealth throughout society by providing a mechanism through which everyone can gain an ownership in companies; “Equities are

a force for good, with the real possibility of making capitalism popular again if people can see how equities are linked to the real economy through jobs and economic growth.”

Overlooked by the Prime Minister’s Christmas card that sits behind him, Xavier explains that equities represent less than 6% of the total investible universe. As an asset class they have been “disadvantaged by regulation, tax rules, and accounting changes”. Despite being such a ‘small’ asset class, Xavier argues that equities underpin the capitalist economy, long-term risk capital, and the debt markets. Like Atlas, the primordial titan holding up the celestial sphere, equities hold up everything else.

As a racing enthusiast, Xavier competed in the 2009 Dakar Rally, a two-week race through some of the most inhospitable places in the world. During the race, which tests driving, navigation and mechanical skills, Xavier believes he learned self-trust. “When you’re stuck miles away from anyone, you have to learn to trust yourself. You realize that challenges to your physical and mental abilities are all in your head. Endurance and persistence is a key differentiator.”

I ask Xavier what advice he has for young people aspiring to be the leaders of tomorrow. “Innovate!” he exclaims. “Innovation is key because it creates value and powers the system. Young people need to think deeply to change the paradigm. Those who look only to the past are less likely to be part of tomorrow’s solution. Ask yourself – what is the future?”

“Equities are a force for good, with the real possibility of making capitalism popular again if people can see how equities are linked to the real economy through jobs and economic growth”

Xavier Rolet, Chief Executive Officer, London Stock Exchange Group, and Company Member,talks to Daniel Yates about his vision for the LSE’s future


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I spent 40 years of my working life in the banking industry, and so this article is based as much on that experience as on my current role as Chairman of Lloyd’s. As both a banker and an insurer, I can see the opportunities and the risks of the recent influx of non-traditional forms of capital into the insurance industry.

What is the scope of this phenomenon? Well, in the last year, the level of the non-traditional capital in global property reinsurance has grown by an estimated 30% and now represents around 14% of the whole. Goldman Sachs believes that, since 2005, alternative capital has grown by over 800%. This is happening because low investment returns are driving capital to seek higher rewards, or greater diversity. So, we are seeing major insurers and reinsurers increasingly accessing new capital sources through Insurance Linked Securities (ILS), Catastrophe Bonds and other index-style vehicles.

It is not possible to look at this without considering another huge change in the insurance industry – which is the changing role of the distribution landscape. Significant consolidation in this field has resulted in more concentration and more competition, driving brokers to search for revenue in new ways. They too are looking at how they can exploit the influx of capital by expanding their role as an intermediary of investment capital for third parties. The final driver of alternative capital into reinsurance markets is the increased accessibility of good quality data. This allows insurers and

reinsurers to model their exposures more accurately and creates more confidence around expected loss.

However, it is worth remembering here the fundamental role of insurance – and especially reinsurance: we exist because we take the risk out of other industries. By definition, therefore, the (re)insurance industry will always carry high levels of volatility.

So, the crux of this matter, of how to invest in insurance, is to recognise this volatility. And consequently, the biggest threat of this alternative capital is the distance between the risk selection process, which understands this volatility very well, and the capital.

If insurance capital loses the connection with the risk, and therefore the insured – it is passive capital. And we saw this sort of passivity all too clearly in parts of the banking market, where capital was being committed away from underlying transactions.

However I believe that it is possible to align the interests of the capital and the insureds and create good solutions. Take pension funds. Generally, this type of fund manager is not looking for the highest short-term return, they are also motivated by the long term need to diversify their portfolio.

So, this capital could be an opportunity for us, particularly as this type of investor is likely to be far from passive – and seek an understanding of the nature of risk. From a Lloyd’s perspective, this sort of capital places value on disciplined underwriting, good supervision and good risk-adjusted pricing – all areas I believe in which we excel.

Non-Traditional forms of insurance John Nelson, Chairman of Lloyd’s Insurance, discusses the new sources of funding and the Market’s relationship with the new investors

“...we take the risk out of other industries. By definition, therefore, the (re)insurance industry will always carry high levels of volatility”


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We do this because it is critical to protect our clients – from massive price fluctuations – and to ensure the continuity of supply of critical risk cover.

We also need to explore how these new forms of capital can help us to address one of the major issues which the insurance industry will face over the next decade or so, and that is the level of global underinsurance. A Lloyd’s report estimated that $168bn of additional capital is needed to be spent globally on insurance premiums to cover natural catastrophe exposures – and the bulk of this was in economies in Latin America and

Asia – in China for example, only around 1% of the economic cost of recent earthquakes has been covered by insurance. It is inconceivable that this will remain the case as these economies commercialise and industrialise.

So, it is our job at Lloyd’s to provide the platform for our members to harness, on the one hand, the capital – and on the other hand, the growth in the insurance markets. We have been extraordinarily innovative in the past, and we must continue to be so.

“...in China for example, only around 1% of the economic cost of recent earthquakes has been covered by insurance. It is inconceivable that this will remain the case as these economies commercialise and industrialise”


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Why the European Elections are important to the City Anthony Belchambers, Company Honorary Court Assistant and founder and recent CEO of the Futures and Options Association (and very active in Brussels), explains what the consequences may be

All European Elections are important to the UK – this one is particularly so, given that the EU sets UK regulatory policy and makes most of the rules governing UK financial services. At the same time, there is every expectation of major tensions ahead not just between the EU institutions, but as the whole issue of closer political and economic union gathers pace and if the prospect of more nationalists being elected as MEPs to the new parliament is fulfilled.

Rule-making tensions ahead?

The EU Commission may initiate legislation, but both it and the EU Council have had to contend upstream with a much more assertive Parliament with increased powers to change or block legislation. Examples in point are EMIR (where the Parliament even threatened to exercise its Level II call back powers), MiFID II and CRD IV. At the same time, the Commission must now contend downstream with the new supervisory authorities, such as ESMA, as they look to exercise and extend their new rule-making powers and acquire a greater role in in direct supervision (putting them at odds with the national supervisory authorities).

A Two Tier European Union?

Severe tensions in the Eurozone have highlighted the need for closer economic and political integration and a separate Banking Union.

However, this creation of “unions within the Union” poses a real risk that those outside the Eurozone block and the related “unions” within the EU will become increasingly marginalised with limited influence over EU policy formation, including on financial services. The UK is particularly at risk insofar as it has been strongly resistant to further integration; has challenged EU competency on several issues (including the scope of the proposed EU financial transaction tax); remains outside the Eurozone; and has demonstrated the fragility of its membership through the holding of a referendum on membership of the EU. More generally, the UK’s, uniquely Anglo-Saxon attitude has often put itself at odds with much of continental Europe. All this points to an increasingly weak negotiating position and, despite EU assurances to the contrary, the emergence of a two-speed Europe.

A More Assertive Parliament?

The role of the EU Parliament in amending the Commission’s draft laws has increased inexorably post Maastricht Treaty, making it the third leg of the “milking stool” (arguably, an unfortunate analogy) and placing it on an equal footing with the Council. Unfortunately, this growth in the Parliament’s power has been matched by a decline within the Parliament of UK influence as the number of Labour MEPs has fallen and the consequences of David Cameron’s decision to withdraw his MEPs from the largest political group of centre right parties makes itself felt. This election will also

“The EU Commission may initiate legislation, but both it and the EU Council have had to contend upstream with a much more assertive Parliament with increased powers to change or block legislation”


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see the retirement of many widely respected UK MEPs, including Sharon Bowles, the Chairwoman of the Economic and Monetary Affairs Committee, and UKIP gaining more seats in the European Parliament – adding to the loss of influence of UK MEPs in the policy-making process.

All Change at the Commission

In May this year, the process of negotiations between the member states in replacing the

Commissioners will commence – an often protracted affair with member states jockeying to hold key positions. The scale of UK financial services means that the post of Internal Services Commissioner is of real importance to the UK, so it is expected to push hard to hold that office (or that of the Competition Commission). In the past, the UK and Ireland have enjoyed a good track record in holding this post, but the UK will need support from other member states, particularly Germany. Given its weakened position in Brussels, it is unlikely to be successful. The prospect of a “no vote” on the expected referendum on membership of the EU adds to the unlikelihood of the UK gaining any key positions in the new administration (although, contrarily, giving the UK one or two key positions could have the spin-off of demonstrating that the UK is not being “frozen out” of the EU decision-making processes – a positive pro-EU message in the run up to the referendum).

For all these reasons, the 2014 European elections will be critically important to the UK and, while this may be unlikely, increased involvement by the UK electorate could play a part in sending a positive message to the EU at a sensitive time.

Why the European Elections are important to the City (cont.)

“... this creation of “unions within the Union” poses a real risk that those outside the Eurozone block and the related “unions” within the EU will become increasingly marginalised with limited influence over EU policy formation, including on financial services”


22

Bank structural reforms and the European financial conundrum Jouni Aaltonen, Company Freeman and Director Prudential Regulation, the Association for Financial Markets in Europe, looks at the link between capital markets and prudential regulation

As a result of the post-crisis regulatory overhaul and of banks adapting their business models to fit with the rules and changed economic conditions, financial markets are at a crossroads. In Europe, the financial conundrum is whether the economies should rely to a greater extent on bank financing or whether capital markets should play a greater role in providing much needed funding for the local economies. While bank lending units have tightened the availability of credit, the slack has been picked up by the capital markets. However, this balancing act is now in question as the European Commission seeks to limit the scope and size of trading activities that universal banks can engage in.

On 29 January the Commission released its proposal for a regulation on structural measures to improve the resilience of EU credit institutions. The proposal introduces a mandatory prohibition of proprietary trading and investments in hedge funds, as well as a requirement for the separation of trading activities into a separate trading entity when a number of metrics are met, affecting the 30 largest European headquartered banks that have significant trading activities.

Although the Commission’s impact assessment argues that the wider costs of the proposal are limited, in practice the impact could be severe. This is as the proposal steps away from the logic retained in the US, French and German proposals that all recognize the importance of market-making and the provision of risk-management services and

of maintaining these services within the core bank, while exempting government bond trading from these restrictions.

This proposal has been received poorly by the corporate sector. A separation of corporate debt markets and risk management services from the main bank could reduce the availability and increase the costs of these services, while European Governments continue to benefit from lower costs due to the exemption. The problem is that the European banking model is based on banks providing both retail and

CM services based on client requirements. Hence, most European banks do not have CM units big enough to carve out a broker dealer that is viable in their own right. Therefore, the proposal may

increase concentration in capital markets, as the mid-tier units may cut their asset books to below the separation threshold. On the other hand the proposed legislation could reduce financial stability and the cost of future bail-outs for deposit

taking banks – in the absence of the balance sheet diversity, their mortgage lending exposures could increase substantially and therefore the next housing market drop may be much more devastating.

To conclude, the proposal introduces more uncertainty at a time when banking structures are changing rapidly. Where we end up is yet to be seen, but we can certainly expect a lively political debate once the new European Parliament and new Commission settle in their roles later this year.

“... the proposal may increase concentration in capital markets, as the mid-tier units may cut their asset books to below the separation threshold”


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Home Remittances from the UKAnwar Zaidi, Company Liveryman and Chief Executive Officer of Habib Bank UK, considers the future of Money Services Business

From 1989 to 2011, remittance outflows from the UK grew by about 3% per annum in real terms to £2 billion. The World Bank estimates that the countries receiving the largest amounts of remittances from the UK in 2011 were; India, Pakistan, Bangladesh, Nigeria and Poland.

The UK Government recognizes the need for efficient remittance services but is also wary of the possible misuse of remittance channels for criminal activities. There is a supervisory regime to combat terrorist financing and money laundering which requires Money Service Business (MSB) to be registered with HM Revenue and Customs (HMRC).

MSBs and Exchange Houses are regulated by the FCA for oversight of the Money Laundering Regulations 2007 and the Counter-Terrorism Act 2008. Details of the two Acts are available via www.legislation.gov.uk. An important aspect to bear in mind under the Money Laundering Regulations 2007 is the individual liability of an officer in a corporate body which includes financial penalties or a prison term of up to 2 years and/or an unlimited fine.

Migrants in the UK send money home using several channels. These include family and friends returning home, money transfers operators (MTOs) such as Western Union and MoneyGram, banks and MSBs. The cost of remitting from the UK

varies per destination country and transfer method. The major MTOs typically charge from 6 to 11% of the total amount remitted. The cost of sending money through MTOs and banks according to World Bank studies shows that MSBs generally charge much less than other MTOs.

It is for this reason that, over the years, the volume of traffic

has shifted to MSBs. However as a consequence of a recent change in UK banks becoming unwilling to entertain bank accounts of MSBs because of heavy potential penalties for breach of money laundering procedures, there is expected to be a reverse shift either to other expensive MTOs or to give impetus to shifting to the undocumented route as described below.

In the interest of ensuring gradual elimination of this non-banking channel, the FCA should bring clarity of their stance on having MSB accounts at banks. In the absence of this, there is that danger of a revival of the Hawala system.

“The UK Government recognizes the need for efficient remittance services but is also wary of the possible misuse of remittance channels for criminal activities”

Hundi or Hawala is an age-old mechanism where funds are passed on to an individual in the remitting country who will arrange with a friend or family in the beneficiary country to deliver the equivalent sum outside the banking channel.


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It would never make global news that the banking arm of a mutual enterprise founded in a small textile city in the North of England early in Queen Victoria’s reign had to be rescued. Nor would the Financial Stability Board, to which we are all looking for global guidance on Resolution and Recovery, have had the Co-Op Bank high up on its list of systemically endangered entities.

The cause of the demise was also unremarkable by the standards of the global financial crisis. There was no trail of involvement in cross-border sub-prime securitisations or the building up of assets in unintelligible issues of multi-layered debt obligations. A poorly conceived and badly executed acquisition resulting in old fashioned property bad debts, started the ball rolling. Along with regulatory fines for mis-selling PPI, the result was a hole blown in the bank’s capital. The bank and its rescue are

clearly idiosyncratic. The Bank was also the victim of regulatory oversight in a way that appeared to be inadequate. Senior management failures and what appears to be at least indifferent regulatory oversight of Board appointments, are often as present as operational risk events in most bank failures and stress the importance of supervision when the crunch really comes. Both of these features were present in the story of the Co-Op.

One singular aspect of the Co-Op’s fall and rescue gives more cause for thought. Governance among mutual and not-for-profit organisations is built around the interests of the stakeholders and typically shuns short-term interests for longer- term objectives. In doing so, accountability and the ability to cope with change are weakened. When independent directors are appointed they need to be sufficiently independent of the mission to be able to ensure prudential compliance. This is not an easy conflict to come to terms with.

When it came, the rescue gave protection not only to depositors and small holders of PIBS. The hedge fund investors, who now own 70% of the bank, agreed to honour some of the ethical objectives of the Victorian Founding Fathers. It is not obvious that this would have been the outcome had the scrummage between the bank, the hedge funds and the regulator resulted in a regulatory-driven resolution process, rather than the actual

deal. There have been no winners out of the Co-Op but the rescue represents another step along the road of understanding R&R. Separately – given the experience of debt holders’ reactions of the use of bail-in in the Co-Op, Greece and Irish cases –

strong reactions from debt holders when it is used, will be a recurring theme until the market can price in the risks. – which volatility in current issuance shows clearly.

Resolution, Recovery, Rescue: The Co-Op – exception and ruleDavid Clark, Company Freeman and Chairman of the Wholesale Market Brokers Association, looks at lessons from practical examples of bail-ins

“When independent directors are appointed they need to be sufficiently independent of the mission to be able to ensure prudential compliance”


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Charity and Education –Articles

Lombard Appeal Update – Frank Moxon, Junior Warden and Chairman of the Lombard Appeal Committee, provides an update on progress with the Company’s £1m charity fundraising appeal p.26

The Mentor Experience – Phil Pickard and Diana Umbarila reflect on how it worked for them p.27

Which charities benefit from Members’ donations? – Chetan Champaneri describes this important subject p.28

Supporting musical education – The Editor visits the new extension of The Guildhall School of Music & Drama p.29

Encouraging Educational Excellence and Promoting the Profession – Thomas Newman of the Charity and Education Committee, reviews an evening that rewarded both students and the Company p.30


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Lombard Appeal Update Frank Moxon, Junior Warden and Chairman of the Lombard Appeal Committee, provides an update on progress with the Company’s £1m charity fundraising appeal

WCIB Lombard Appeal – shark swim

The much anticipated shark swim took place in Ellesmere Port, near Liverpool on Sunday, 26th January and Friday, 7th February 2014. Simply put, it was an awesome experience! Each of us spent 30 minutes with the sharks and some sting-rays, moray eels and other creatures, all without the benefit of a safety cage. It was even deemed sufficiently interesting to deserve coverage on City AM’s blog spot (www.cityam.com/blog/1390840238/sharks-versus-bankers).

To be honest, I think everybody was nervous to some extent beforehand. Bear in mind some people had never scuba dived before! Would they remember to breathe through the mouth and not the nose? What if their mask kept filling up with water? – which mine did. Then, of course, there were the sharks circling above, behind and in front of you. Nevertheless, whatever they might have thought while underwater, everybody announced that it was brilliant having completed their dive. Mind you, whether they want to do it again might be another matter altogether…

My thanks to the members of the team (WCIB: Selina Chotai, Tom Dixon and Diana Umbarila;

non-WCIB: Jenny Coleman, Julian Emery and Alastair, Angus and Sir Tim McClement) who took part with me and overcame their inner doubts and to all those who so kindly sponsored and supported us. Net of expenses, the event raised over £10,600 for the WCIB Lombard Appeal.

What next?

There is still more to come in 2014: a Three Peaks Challenge Attempt on 27th and 28th June (climb to the top of the highest peaks in Scotland (Ben Nevis), England (Scafell Pike) and Wales (Mount Snowden) in 24 hours), a ladies-only fundraising event on 8th September and an auction of modern art.

How can you help?

We don’t just want money. We need volunteers! If you have time, connections, access to venues and potential raffle or auction prizes or good fundraising ideas we would like to hear from you. People who would like to undertake the Three Peaks Challenge, especially any drivers/support team members, are especially welcome. Contact the Clerk ([email protected]).

“The Mansion House scholarship not only helped me to complete my Masters in Finance and Investments but it also gave me the opportunity to meet renowned figures people in the financial industry” – Scholar

Tom Dixon (extreme left) and Diana Umbarila (centre) meet a male shark

The Junior Warden has no idea what’s just about to happen…


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The Mentor Experience Phil Pickard and Diana Umbarila reflect on how it worked for them

Mentor

The mentoring role is not onerous in terms of time from my experience. It is fulfilling to work with people pushing themselves and being able to assist in a quite holistic sense.

In my case I first helped Diana in terms of a suitable subject to investigate for her dissertation, gave

some guidance on initial lines of enquiry, potential sources, etc. I then had the pleasure of talking to someone who quickly knew more about the subject than I did, therefore enhancing my knowledge. In finalising the dissertation, I helped with proof-reading and minor grammatical corrections (Diana comes from Colombia), plus suggestions on presentation. I would expect that most of the scholars are like Diana and highly competent so this was very much a pleasure rather than work.

I have stayed in touch with Diana both through WCIB events and externally, and it was gratifying to help her as she looked to move from academia back into the business environment as well as discussing life’s broader challenges, such as moving into London. We meet a handful of times

each year to exchange news and views. A highly rewarding experience all round for limited time invested. You never know, you may find a top quality new employee!

Mentee

There are many benefits to being a Mansion House Scholar, one of the biggest, as a foreign student, is having a mentor to provide personalised guidance on a whole range of subjects. This not only helped me with my studies but also indirectly improved my general wellbeing through support in other areas.

As Philip and I were in different cities communications were mainly via email and phone, however, this did not impede discussions and exchange of ideas. Philip’s help and advice on my dissertation motivated me to pursue a deeper research in a topic that is relevant worldwide. Due in part to Philip’s help, I was awarded “Best Dissertation” and received a wonderful prize. Philip’s wide knowledge on finance and economics led to further communications and we are still in regular contact 2 years later.

I am very grateful for Philip’s academic guidance and overall support and feel honoured to have been part of this brilliant programme.

If you are a Liveryman and are interested in mentoring a Mansion House Scholar please contact the Clerk.

“The WCIB was always willing to invite me to networking events which made my experience in the UK as enriching as possible” – Mansion House Scholar.

“Assignment of a mentor to each scholar is a brilliant part of the [Mansion House] scheme” – Scholar

“...it was gratifying to help her as she looked to move from academia back into the business environment”

“I am very grateful for Philip’s academic guidance and overall support and feel honoured to have been part of this brilliant programme”


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The Company’s aims are those of all Livery Companies and Guilds; Fellowship, Charity, Education and the Promotion of Trades and Professions. The charitable activities of the Company consist of allocating grants to worthwhile causes where the money can make a positive impact, using the funds of the International Bankers Charitable Trust as well as of Company Members who generously volunteer their time.

Typical grants are up to £1,000; larger awards are considered where funding can make a clear difference in accordance with the Company’s aims. In the 2013 financial year, 23 grants were awarded, totaling circa £83,000 (2012 financial year: 31 grants, totaling circa £95,000).

One high-profile charitable activity of the Company is supporting the WCIB Lombard Prize which is described in the article by Thomas Newman later in this section.

The Company is a major supporter of the Brokerage Citylink. The Brokerage Citylink is an independent charity providing young people in London with various employment opportunities. In the 2013 financial year, a grant of £45,000 was made to the Brokerage Citylink (2012 financial year: grant of £30,000). This grant was made to help fund a flagship programme called ‘Working in the City’, and is part of a three- year commitment by the Company. The programme aims to provide a pathway into the City for deprived students from Inner London Boroughs, and involves a series of inter-active workshops for about 20 students at a time to understand the City and the skills employers look for.

The Company also supports the Brokerage Citylink through the Schools’ Annual Essay Competition. In the 2013 financial year, a grant of £4,600 was made for the Essay Competition (2012 financial year: grant of circa £5,000); half of this sum is awarded to the prize-winners, the other half goes to the schools attended by the prize winners. The Clerk describes this important Competition in his article later.

Another major charitable activity of the Company is the supporting the Mansion House Scholarship Scheme. Scholarships have been

made available to overseas students taking Masters-level degree courses at British Universities or for training and work experience in the United Kingdom’s financial services industry. In the 2013 financial year, a grant of £5,000 was made (2012 financial year: grant of £5,000). This is in addition to a grant of £5,000 to the Scheme made annually by the Company from the KC Wu Fund related to the Company.

The Company also supports professional bodies connected to the financial services industry – providing speakers, careers advice and supporting other initiatives of the IFS and providing support for a financial literacy initiative undertaken by CISI.

Finally the Company is engaged with three London schools where bursaries are offered to help sixth formers get a level of education that their families would not otherwise be able to afford. In 2012 and 2013 these grants included the Lord George Scholarship at Dulwich College, in memory of past Master Lord (Eddie) George (paid from the Past Masters’ Fund), and a bursary at both City of London School and City of London School for Girls. In 2013 these grants totaled £19,200.

Which charities benefit from Members’ donations?Chetan Champaneri describes this important subject

“I hope to work in international banking or finance in the future.” – Lord George Scholar

“I am immensely grateful to you for allowing me to receive an all- round, exceptional education” – City of London Girls School student

“In the 2013 financial year, 23 grants were awarded, totaling circa £83,000”


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Supporting musical educationThe Editor visits the new extension of The Guildhall School of Music & Drama

The School is a vibrant, international community of young musicians, actors and theatre technicians. It produces outstanding graduates whose talents light up stages and concert platforms around the world. The quintet ‘Bold as Brass’ who played at the 2014 Banquet, are students from the School.

“The School is the largest single provider of specialist music education for under 18s in the UK – providing opportunities through the Saturday activities of Junior Guildhall and the Centre for Young Musicians. In addition, its award-winning outreach and community programme, Guildhall Connect, runs participatory music programmes for thousands of children across the UK. In partnership with the Barbican Centre (a stone’s throw away), its joint Creative Learning Division runs programmes to demonstrate the value of arts to diverse audiences across London”.

“The Company has supported the School’s exciting new performing Arts Centre and training facilities in the heart of the City of London, Milton Court. The

new world-class venues – Concert Hall, Theatre and Studio Theatre – provide direct experience of rehearsing and performing in professional spaces its students will perform in throughout their careers. The three Rehearsal Rooms are the same size as the theatres so that productions can be transferred directly from rehearsal to stage – integral to the training of actors and opera singers. In addition, the new Television Studio Suite provides our actors, for the first time, with the specialised training needed in film and television. Other spaces include a rehearsal gym, production offices, costume and wig rooms, as well as seminar and meeting rooms”.

Perhaps appropriately, the Company’s support of Milton Court and its students is recognised with a plaque displaying our crest on the Livery Company Donor Board – which is located in the City Livery Companies’ Bar (adjacent to the Studio Theatre). The School has thanked us very much for our grant.

Please contact the Clerk if you would like to visit it.

Proud to be an International Banker?

Keen to support your Livery Company’s charitable work?

Want another pair of cuff-links?

Show your support with these splendid cuff-links in a metal shield design bearing the Company’s escutcheon in enamel with a flip whale tail fastening, designed and supplied by Simon Carter of London. Sold in aid of the

WCIB Lombard Appeal, proceeds will go to the International Bankers Charitable Trust which finances your Company’s charitable activities.

The cuff-links are priced at £50 per pair and will be produced to order provided there is demand for at least 50 pairs from the Company’s membership.

To order your pair please contact the Clerk ([email protected]).

NEW! Worshipful Company of International Bankers Cuff-links

17m

m


30

The C&E Committee creates strong relationships with Universities and Business Schools to further the Company’s aims to encourage educational excellence and promote our profession. Through these relationships the Company supports the schools and students while making all of these purposes known to the professors and students. Within the C&E Committee, the Education and Awards Working Group currently has 11 Relationship Managers covering 14 Academic institutions and is currently adding 3 more institutions and Relationship Mangers.

A cornerstone of the Company’s programme is the award of the “WCIB” and “Lombard” prizes. The Company awards a WCIB prize for the best thesis or extended piece of written work at each of the Schools where we have a relationship. 14 WCIB Prizes were awarded in 2013. The winner of each of the WCIB Prizes receives a cheque for £300, a certificate, and is then eligible to compete for the Lombard Prize. The winner of the Lombard Prize is chosen based on their theses and oral responses to questions from the Working Group on current topics in the City. The Prize Winner receives a cheque for £1500, a silver salver, a certificate and an invitation to the Annual Banquet. The most

recent winner was Weylin Poon from Durham University for his thesis on “The Relevance of Social Media: From The Perspective of Newcastle Building Society”, and the Runner Up was David Farley of IFS. Both attended the Annual Banquet. A picture of Weylin receiving the Prize from the Master is on this page.

The Company also wants to expand relationships with the Schools into broader and more inter-active involvement between the Members and the Students/Professors. Involvement ranges from the Members providing expert knowledge as Speakers, through competition judging and career counselling, to providing guidance

to the Professors/Administrators. Members also arrange for the students to meet City institutions.

One example of deeper involvement with a school was where we worked with the student-led Finance Society to support a conference at that School with four Members of the Company as Speakers. Both Speakers and Students enjoyed the experience and learnt from each other. Another example is where the Company supports access to the economist.com for all students at the school (about 3,500 students). The Company’s sponsorship is noted on the welcoming screen.

Encouraging Educational Excellence and Promoting the Profession Thomas Newman of the Charity and Education Committee, reviews an evening that rewarded both students and the Company

Weylin Poon from Durham University


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Encouraging Educational Excellence and Promoting the Profession (cont.)

A key goal for the effort is to continue to increase Member involvement with Business Schools so could Members who are alumni of one or who are, interested in speaking at or becoming more involved with any of our relationship Schools, please advise the Clerk, ([email protected]) so we can add you to the list of those informed of any Company related events/opportunities occurring at these Schools. Those Schools with which the Company already has a relationship or is in process of developing one include:

Birmingham UniversityBristol UniversityCambridge Judge BS Cass CranfieldDurham

Greenwich University Henley Business SchoolIFSImperial College Kings College London London Business School

London MetropolitanLSE Loughborough UniversityManchester UniversityNewcastle BS Said Business School, Oxford

In order to raise funds for the WCIB Lombard Appeal we are planning to hold a gala dinner and contemporary art auction later this year. We intend to showcase a number of different galleries and artists on an innovative revenue sharing basis to ensure the quality and breadth of submissions.

To link successfully the worlds of Art and Finance we wish to involve curators of the private collections of financial institutions and other relevant professional firms in recommending and selecting featured artists.

Your help in identifying institutions and curators able to support this initiative would be very much appreciated.

Does your employer have an art collection?

Who is its curator?

Does it support or sponsor charitable or art-related events?

If you are able to provide useful contacts or would like to receive more information please contact the Clerk ([email protected]).

WCIB Lombard Appeal Needs Your Help!


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Communicating with Members – Articles

The Soft Power of the City of London – Sir Roger Gifford reviews an eventful year as Lord Mayor p.33

The Ceremony of The Loving Cup – Frank Moxon, the Junior Warden, explains the history and practice of an ancient ceremony performed at the Company’s Annual Banquet p.34

A look back at the Company’s Financial Year – Peter Estlin and Chetan Champaneri review the fifteen months to September 2013 p.35

How does the Events Committee choose events? – Marianne Woods, Chair of the Events committee, looks behind the scenes p.37

Gaye’s Events Diary p.38

The Visit to the Churchill War Rooms – Vincent Mercer, Liveryman, describes a fascinating private visit to the War Rooms p.39

The Clerk’s Comments – Nicholas Westgarth looks back at a full first year in office and forward to the future p.40

Your Associate Committee – Compiled by Mark Cazaly, Deputy Editor p.41

The new Website – Max Asmelash, Chairman Company eGroup, explains what has been achieved, and looks into the future p.43


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The Soft Power of the City of LondonSir Roger Gifford reviews an eventful year as Lord Mayor

What a year to be a banker representing the City. For a year my life was defined by the position and responsibilities of being the Lord Mayor of the City. It is an ancient office – 800 years old and constantly developing – but at its core its values remain the same. It may seem anachronistic to some in the twenty first century, but both the City Corporation and its mayor and have a very real and significant role, demonstrating the ‘soft power’ of the City’s influence. The mayor has ministerial status abroad which means many meetings with the Prime Minister, the Chancellor and senior government figures, and overseas, the mayor represents UK financial services to overseas governments.

The office has always been important as a focus for the City’s activities, and for a banker 2013 was perhaps particularly relevant. We had started to recover well from the world’s first-ever global financial crisis – and the worst in many individual countries for decades, but in 2013 the crisis of confidence in banking ethics escalated with continuous bad news – from LIBOR manipulation to PPI mis-selling. Representing UK financial services was a challenge and I was grateful to have come from a bank and a background which were not implicated in these events, and also to have great support from the Company with its strong ethical code for individual members.

In retrospect I very much hope 2013 will be seen as a turning point in this reputational crisis. The Professional Standards Board which the Parliamentary Banking Commission proposed and

which Sir Richard Lambert is organizing, and Lady Rice’s Institute of Bankers’ initiatives to which the major banks have signed up, show both the desire for change and the methods by which it may be achieved. These are important steps in regaining the public’s confidence and I strongly supported both.

The year itself was literally extra-ordinary. Clare and I lived in the Mansion House with its staff of around thirty – from diary keepers to liveried footmen, and slept in a four-poster bed in a heavily plastered and decorated bedroom. This all sounds splendid – but it came with a

relentless schedule – ten to fifteen diary events a day, dinners every night and 100 days of travel to over 30 countries.

What I need to add is the personal pleasure we had from it all. It was simply great fun and I met so many people whom I shall remember for a long time – from the grandest presidents and potentates to the local pensioner to whom I presented an award for long service and who showed in his emotions how much receiving an award from ‘The Lord Mayor of London’ meant to him. We always knew that it was “only” a year, so leaving it all behind hasn’t been a problem though dealing with the accumulated papers and presents is!

I look forward to welcoming you to SEB on the evening of May 15th and to answering any questions you might have on what it is to represent the City in this way, and how you might become involved, should you so wish!


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City livery companies traditionally indulge in the ceremony of the Loving Cup at formal dinners. Theoretically a simple process, deft execution is often rendered tricky by a tendency for diners to have achieved a state of social confusion by the late stage of the dinner that it takes place.

The ceremony is said to date back to England before the Norman Conquest when even high society was apparently so uncivilized that a fellow could not stand to drink a toast, thus exposing his unprotected flanks to other diners (the Loving Cup requires two hands), without running the risk of assassination by a blade or other weapon. King Edward the Martyr is said to have met his doom in this way in 978 AD on the orders of his Mother.

When the person about to drink from the loving cup takes possession of it you must rise also. Bow to

each other before you lift the Cup’s lid and hold it aloft while the drinker sips from the Cup (you still facing them) and then wipes its lip clean (a napkin is usually attached). You will now replace the lid and take possession of the Cup before you bow to each other again. Now you must turn to face the next person and repeat the process (although this time, of course, you are the drinker). Once you have passed on the Cup you will stand with your back to your successor while they drink; only retaking your seat when they have passed on the Cup to the next drinker.

Now, let’s be honest, these instructions (and I have done my best) are confusing even when sitting at home reading this Magazine in the cold light of day. If it didn’t quite work out at the Annual Banquet, you now have these instructions and a few months to get some practice in at home.

The Ceremony of The Loving CupFrank Moxon, the Junior Warden, explains the history and practice of an ancient ceremony performed at the Company’s Annual Banquet

Photographs courtesy of Jeff Jones Photos


35

A look back at the Company’s Financial YearPeter Estlin and Chetan Champaneri review the fifteen months to September 2013

In this article, we will take a look at the financial performance of the Company for the 15 month period ended 30th September 2013.

As you may be aware, the financial year-end of the Company was changed from 30th June to 30th September for the 2013 accounting year. This was to align

the Company’s accounting year with the Company’s membership year, thereby generating management and administration efficiencies. The Finance Committee is therefore pleased to announce that the accounting year and membership year alignment process has been very successful.

Readers may be interested to learn that that Company’s finances are managed according to whether Company activities relate to day-to-day operations or charitable activities.

The Company’s day-to-day operations are managed through the Company’s ledgers. Charitable activities are ring-fenced through separate ledgers relating to the International Bankers Charitable Trust

The following is a summary of the Company’s audited financial performance from both a “day-to-day operations” perspective and a “charitable endeavours” perspective

We focus on six key measures, categorised in terms of “Income”, “Expenses” and “Assets”:

1. Subscription income

Subscription income in the 15 months to 30th September 2013 was circa £185,000 (12 months to 30th June 2012: circa £138,000). This is an increase of 9% (after adjusting for the change in the accounting time period) and reflects the growing membership of the Company across all the various membership categories (e.g. Full Member, Associate Member, Student Member etc).

2. Net income from events

Net income from events in the 15 months to 30th September 2013 was circa £13,300 (12 months to 30th June 2012: circa £12,400). This is an increase of 7% and reflects the growing popularity of the broad calendar of events organised by the Company, ranging from evening receptions to the Annual Banquet and the Installation Court Dinner.

3. Donations

Donations in the 15 months to 30th September 2013 were circa £136,000 (12 months to 30th June 2012: circa £124,000). This is an increase of 10%, and incorporates amounts generated by Company fund-raising events rising from circa £2,500 to circa £18,000. Such an increase in donations is a testament to the continuing generosity of Company Members.

In summary, the financial performance of the Company for the accounting year ending

30th September 2013 has made progress. Membership numbers continue to rise,

and so subscription income continues to increase; Company events continue to grow

in popularity; donations from Company Members remain generous, allowing the

Company to award grants to numerous worthwhile causes.

“The financial health of the Company is robust, with investment of Company funds yielding positive returns”


36

4. Investment income

Interest on investments in the 15 months to 30th September 2013 was circa £18,000 (12 months to 30th June 2012: circa £9,000). This is an increase of 100%. It reflects the positive investment management approach of the Finance Committee to invest Company funds in financial instruments that aim to maximise returns given the Company’s current risk averse profile.

5. Grants payable

Grants payable in 15 months to 30th September 2013 were circa £83,000 (12 months to 30th June 2012: circa £95,000). There is an article with detailed information in the Charities section.

6. Investments

The value of investments on 30th September 2013 was circa £896,000 (12 months to 30th June 2012: circa £860,000) and consists of cash funds/near cash funds. This is an increase of 4%, outperforming inflation, and reflects the sound management of Company funds by the Finance Committee.

The financial health of the Company is robust, with investment of Company funds yielding positive returns.

The Finance Committee is cautiously optimistic that the 2014 financial year will be just as successful as the 2013 financial year.

A look back at the Company’s Financial Year (cont.)


37

The Events Committee’s goals are first to promote the international financial services industry by organising events that help to educate and inform members and secondly to allow them to network. Our Events allow participants to debate, learn and socialise together whilst raising the profile of the sector; contributing to the Company’s charitable aims and encouraging new members to join and others interested in the international financial services sector to become involved.

The Committee’s has a consistent strategy, and each year’s events fall into three categories:

(1) Regular annual events such as the Banquet and Installation Court Dinner which are formal events and form the basis of our Calendar.

(2) Events which are focused on enhancing the membership experience and raising awareness of the importance of London as a cultural and financial centre such as our regular private evening viewings at the Queen’s Gallery Buckingham Palace and the ever-popular Ceremony of the Keys at the Tower of London. We were also delighted to be able to tour Apsley House for the first time on 8th April and look forward to a further memorable visit to the State Apartments at the Royal Hospital Chelsea on 10th July which we hope many of you will enjoy.

(3) Events which are topical and relate to current events in the international banking and economic sectors such as the stimulating

reception at ING with Lord Howard Flight last November. Coming up in May we have two superb events in store – on 1st May Sir Jon Cuncliffe CB, Deputy Governor, will speak at an evening reception at the Bank of England; and on the 15th our own past Master Roger, now Sir Roger, Gifford, will give us an early glimpse of his year as Lord Mayor. Both evenings promise to be exceptionally interesting and will offer our members and guests access to truly outstanding International bankers.

The Committee members are a wide-ranging group who are usually able to access the relevant venues and speakers that our

membership requests. Sometimes Events are not possible due to their cost, unavailability of speakers or other factors. For this reason we operate a strategy which looks forward up to 15 months, and keep a rolling list of potential Events. Some Events can be set up more rapidly because of world events, for example specific topical speakers. We always insist on Chatham House Rules.

The Associate Committee, and the Arts, Sailing and Golf groups regularly liaise with the Committee. We also work in tandem with the Lombard Appeal which has the remit to organise specific fundraising events.

Any members with ideas for Events or for Speakers that they think would be of interest, should email Gaye Murdoch in the first instance who will bring it to the next Events Committee Meeting – these are held quarterly.

How does the Events Committee choose events?Marianne Woods, Chair of the Events Committee, looks behind the scenes

“Coming up in May we have two superb events in store”


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Coming Up – Dates for your Diary

1st May 2014 Evening Reception in the Bank of England Museum, Speaker Sir Jon Cunliffe CB, Deputy Governor

10th July Summer Event – see box on next page

15th May Evening Reception at SEB, “In the Steps of Dick Whittington” Banks and banking in turbulent times: Sir Roger Gifford talks about his year as Lord Mayor of London

23rd September Installation Court Dinner. Guest speaker Douglas Flint CBE, Chairman of HSBC Group Holdings plc

10th June Evening Reception on the roof terrace at Taylor Wessing. An excellent opportunity to introduce prospective members to the Company

7th October Harvest Festival Service at St Mary-le-Bow

24th June Buffet supper in the Regimental Mess of the Royal Regiment of Fusiliers at the Tower of London and Ceremony of the Keys

6th November Evening Reception, Speaker the Countess of Carnarvon (chatelaine of Highclere Castle)

Highlights of Autumn 2013 included

A Visit to the College of Arms – the only part of the Royal Household remaining in the City. William Hunt, the 44th Windsor Herald since 1338 took us through its history. No doubt in my mind that the Elizabethan Coats of Arms were vastly better than those of the modern politicians, sportsmen, entertainers; Bruce Forsyth has a wavy piano and David Beckham a swan facing the wrong way – as William Hunt said backwards (actually that was not quite the word he used!) into battle!

A Reception at the Special Forces Club in October was an evocative reminder of the bravery of men and women who fought – and many gave their lives – to set Europe free in the Second World War. The air of mystery is retained; there is no name outside the front door, just a number (and unbelievably I have yet to meet a taxi driver who knows it!)

Gerard Lyons, Chief Economic Adviser to Boris Johnson, was an entertaining speaker on “Prospects for London and the City”. London has a lot going for it although he thought “pessimism” was Britain’s biggest export!

The Evening at the Royal Geographical Society included a special exhibition of artefacts for us to view. I noted the 15th Century atlas where the map of Europe shows Scotland sort of moving away, devolving even then!

2014 began with a Private Evening at the Queen’s Gallery, Buckingham Palace which was as popular as ever (the glass of wine in the shop is much improved)! Members enjoyed a Choral Evensong and Tour of St Paul’s Cathedral and a Private Evening at the Churchill War Rooms where the layout remains the same as when Churchill took decisions crucial to the survival of the nation.

Josephine Oxley, Keeper of the Wellington Collection, and Lady Jane Wellesley, daughter of the current Duke of Wellington, gave us a private tour of Apsley House in early April. Jane Wellesley made history come alive with a fascinating insight into her family. Amazing to think when Apsley House was built it was in the country and guests apparently complained it was out of the way!’

Gaye’s Events DiaryThe following are a few highlights from the recent Events programme

1st MAY

15th MAY

10th JUN

24th JUN

10th JUL

23rd

SEPT

7th OCT

6th NOV


39

On Monday 10 February a group of members of the Company and their guests had the pleasure of an exclusive out of hours visit to the Churchill War Rooms. Phil Reed, the War Room’s Director, gave a fascinating introductory talk. Unlike Adolf Hitler and Joseph Stalin, who had purpose-built underground bunkers, the nerve centre of Winston Churchill’s war-time operations was a converted basement just around the corner from Downing Street, which was never intended to be anything more than a refuge for stranded bureaucrats.

Following Phil’s talk, members were free to explore the War Rooms at their leisure. Left just as they were when last used, they are a fascinating insight into daily life in the War Rooms during the dark days

of the Second World War: the maps still show the pin pricks plotting the routes of vital convoys: the ‘beauty parade’ of coloured phones which kept the

duty chiefs of each of the defence forces in touch with their own nearby command centres – so is the desk from which Churchill made his famous wartime speeches. The

open War Rooms have now returned to their original size and incorporate a Churchill exhibition, chronicling events in his life with recordings of his key speeches, displaying various objects used by him, such as his famous half-smoked cigars.

This was yet another enjoyable and informative private visit Gaye organised and for those members who missed the event, well worth a visit.

An Evening Reception in the State Apartments at the Royal Hospital Chelsea, home of the Chelsea Pensioners. Guests will enjoy access to the Garden. Join us and meet some of the amazing Chelsea Pensioners

The Visit to the Churchill War RoomsVincent Mercer, Liveryman, describes a fascinating private visit to the War Rooms

The Company’s 2014 “Summer Event” on 10 July

“...the maps still show the pin pricks plotting the routes of

vital convoys”


40

The Clerk’s Comments Nicholas Westgarth looks back at a full first year in office and forward to the future

Looking back over my first year as Clerk, I am amazed by how much the Company does to promote Fellowship amongst the members and to further the Company’s charitable aims. A common question is whether members contribute enough. Every member of the Company is volunteering something, even if it is only an annual subscription and voluntary donation to keep the Company active and its Charitable Trust healthy. Members who are able to give more, either of their time or to dig a bit deeper into their pockets, are much appreciated – it is important, and often satisfying for both.

To see what an impact the Company achieves you need to look no further than the annual ‘Schools Award’ ceremony held in early December and hosted through the generosity of Liveryman Gerald Walker at ING. The Competition, run by a team from the Company and our Partner Charity, Brokerage Citylink, is open to sixth form students at state schools in the inner London boroughs. The essay title for 2013 was “Should the UK maintain its overseas aid programme in times of austerity?” An impressive 144 students took part with the overall winner being Kristina Terech, a student at Newham Sixth Form College. All winners are invited to the Awards Ceremony along with their teachers and parents. The dedication of these and of the students achieving a good performance, is inspiring and should give us all confidence that there are parts of society and the education system that work well and flourish when given a chance to shine on a

wider stage. It was great over-hearing some of the conversations between the students and members of the Company who attended, both sides having

something to learn from each other. It more than made up for the slight pain in my wrist I was feeling after signing 144 certificates. I thoroughly recommend attending the next Awards Ceremony if you haven’t been to one.

In the Clerk’s Office we have just said goodbye to Sean Lo who has been with us as Assistant Clerk (Finance) for 7 months whilst Ankita Patel has been on maternity leave. Sean has done a tremendous job implementing the change to a new accounting software package (SAGE), overseeing the annual audit and making recommendations on ways to improve the way we run annual

membership renewals. There is still some way to go on the latter but it is now written into my objectives for this year.

Everyone who attends Members’ Events will know of the hard work and panache Gaye Murdoch contributes to make the Events a success; there were 20 in 2013, I think that is a record. Inevitably the cost of running these keeps rising but we do our best to keep the cost to members as reasonable as possible.

As ever I will conclude by saying that it is always good to see people in the Company’s Office, so please drop in if you are in the vicinity of 12 Austin Friars EC2.

“It was great over-hearing some of the conversations between the

students and members of the Company who attended, both

sides having something to learn from each other”


41

The Associates CommitteeCompiled by Mark Cazaly, Deputy Editor. Photography courtesy of Neil Cordell: http://neilcordell.com

Welcome to the Associate Committee pages of the International Banker magazine. 2014 sees a bolstered Associate Committee with new and serving members making up an enlarged team of eight members to take the Associates’ work even further. Ed Ellerington is the new Chair, relieving Laura Whitehead.

The Committee’s role within the Company is to further the younger membership and facilitate a number of engaging and innovative events. Each member of the Committee also takes a place on each main Committee of the Company to provide the Associates’ view on the various topics the Company works on.

This edition gives an overview of the various events we have been involved with since the last edition and provides a flavour of the events to come this year.

Drawn from a wide range of City backgrounds, I introduce some of the members of the Committee below with brief biographies, the rest will follow in the next edition, by when I suspect you will know us all well.

We are always looking for new ideas and to hear what the Associates have been up to as well as interesting articles so please do get involved and let us know your thoughts on what you think we should be working on. Feel free to contact me at [email protected] with your thoughts.

Recent events

Pre-banquet Drinks

This year’s Associates event calendar began with pre-banquet drinks held for the second successive year at the Corney and Barrow near Guildhall. The event, which saw over a dozen associates and guests gather in an informal setting ahead of the banquet, was a fantastic way for new and established members to mingle and network ahead of the main event at Guildhall. It was great to see a number of new faces, many of which have joined on the back of last year’s Associate event programme.

By Ed Ellerington

The City Debate

In November 2013 The Associate Committee hosted a debate at the British Bankers’ Association. The topic of the debate, chaired by Peter Estlin, was: “This house believes that the sustainability of London’s leading role in global financial services is based on revolution not evolution”. The event was sold out with 140 tickets going to both members and non-members alike. drawing people in from the financial sector as well as academia.

Arguing for the motion were Maureen Erasmus (Partner, Bain & Company) and Giles Williams (Senior Partner, KPMG). Arguing against the motion, Anthony Browne (CEO, British Bankers’ Association) and Colin Passmore (Senior Partner, Simmons and Simmons). The Panel brought with them a wealth of knowledge and experience on the subject, which made for an interesting and vigorous discussion while still keeping the debate light hearted. The main focus was on the regulation of the financial services sector as a whole. After the two sides made their cases, the floor was opened for questions from the audience, and then a vote was held to decide the winner. It was close but the audience voted against the motion, in favour of evolution. But the debate on the merits of both sides continued long into the networking drinks afterwards!

By Laura Whitehead

Your new Associate Committee is:

Ed Ellerington (Chair)

Max Asmelash (Membership and eGroup)

Mark Cazaly (Communications)

Chetan Champaneri (C & E Committee)

Selina Chotai (Court Observer)

Kerttu Kulasepp (Lombard)

Chris Sanders (Finance)

Laura Whitehead (Events)


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Ed Ellerington (Chair)

Ed Ellerington is both a Freeman of the Company and the City. Ed has been involved with the Worshipful Company of International Bankers since 2010 being a former University and Lombard prize winner.

Ed has over 8 years’ experience in real estate and banking and currently heads up regional investment within Grainger plc having previously worked in corporate finance and equity investment at Lloyds Banking Group and Bank of Scotland Corporate.

Max Asmelash (Membership and eGroup)

Max began his career working as a Senior Derivatives trader for an investment firm in the City of London in 2006. Following that, he established his own regulated investment firm in 2008, trading across a wide variety of asset

types. Joining the Company in 2011, Max is also involved with the Lombard Committee and the Company’s online presence in many areas.

Mark Cazaly (Communications)

In his first role in the City, Mark joined the British Bankers’ Association in 2011 in the communications team. After two and a half years at the BBA, Mark moved to Energy UK to take up another communications

role. Mark is a Freeman of the Company having joined in 2013.

Selina Chotai (Court observer)

Having spent the last six years in Treasury and Risk, managing capital, liquidity and funding for Santander and Barclays, Selina has taken leave from banking to set up new venture. In her free time she creates websites and designs home interiors. She

continues her work for the Associate Committee as Court Observer, for the Lombard Appeal and assists with the Sailing Club.

Upcoming events

Up next for the Associates is this year’s ‘Dinner with a Twist’. Previous years have seen us dine in the dark at ‘Dans Le Noir’ and taste the exotic at ‘Archipelago’. However, in our effort to go one step further and host our most ambitious event to date, we have arranged 15 tickets to the ‘Gingerline’,

an exclusive and mysterious dining experience based in East London. The assembled team will be whisked away to an unknown location on 22 April to take part in the pop-up restaurant phenomenon at the hands of a team of local experts.

The Associates Committee (cont.)


43

The new Website Max Asmelash, Chairman Company eGroup, explains what has been achieved, and looks into the future – http://internationalbankers.org.uk/

The Company’s website was updated and launched on 10 November 2013. It is now a white-themed site divided by clear sharp lines.

The e-review was undertaken in 2012 by the eGroup with the encouragement of the Communications Committee, and was implemented in 2013. The current team is Mark Henthorne, David Munro, James Rose and Simeon Williams. Its role is to focus on the website, recommend new electronic changes which will improve media efficiency for the Company, and begin cementing the new features of the new website member’s area. We believe this private section will be an excellent platform for members to take more of an active role within the Company. It is most certainly a case of taking an evolutionary approach to a revolutionary digital age, which should be treated with caution. Measuring how it will benefit each member can

be quite scientific, which is the exciting part and we would rather like to leave you excited for now rather than tell you about the great new ideas

which are set to appear on your computer screens. The key driver to optimising the website, is user participation, therefore we advise members to welcome change and take

an active part in future electronic mediums for member communication. Rome was not built

overnight; therefore it will be sometime until you see the new interactive features. However we are finalising a new set of recommendations, which we aim, to implement in Q3 2014.

We strongly encourage members to provide us with any new suggestions for the website. The eGroup team are looking forward to taking the website onto the next level and hope you will benefit from the new features with immediate effect!

“The key driver to optimising the website, is user participation”

Sports – Articles

Golf news Golf news – Cliff Knowlden enjoys the start of the season p.44

Sailing Club Spring Update – Kerttu Kulasepp, Commodore of the WCIB Sailing Club, looks forward with anticipation p.45

Inter-Livery Clay Pigeon Shoot – Michael Llewelyn-Jones, Middle Warden, knows there is talent out there……… p.45


44

Golf news Cliff Knowlden enjoys the start of the season

After what has been a pretty dire winter for golf (weatherwise), our golf season began with a meeting at West Hill Golf Club on March 17th.

28 players (including 11 guests) played 18 holes in dry conditions and even some sunshine. Considering the weather of only 2 weeks previously, the course was in very good condition. The Club is undergoing a major bunker refurbishment programme and when complete, will be back to pristine order.

Our main prize (The AGM Salver and Captain’s prize) was won by Michael Bowles with a fantastic 42 points. Cliff Knowlden was 2nd on 36 closely followed by Tom Dissen on 34 (on countback from Andrew Lee). The Guest Prize was won by David Powell (37 points) guest of Bob Saxton, from Paul Barker 34 (guest of Cliff) and Derek Nute

(33) guest of Peter Hinson. Sally Rowley-Williams won the Ladies Prize with 30 points. Our Captain, Jonathan King, won the “Seniors” Prize whilst the 2 nearest pin competitions were won by Cliff and John Thomson (guest of Jonathan).

A short AGM was held after the Event, and Jonathan thanked all members who had represented the Company in Match Events last year. We are again well represented in a variety of events in 2014 – good luck to everyone.

New Zealand Golf Club invitations are sent out in early April (date of Event 3rd June), whilst details of the October 2nd Event at Swinley Forest have already been sent out as we need responses on numbers by May 10th please.

Good luck with your golf for the rest of the year.


45

Sailing Club Spring UpdateKerttu Kulasepp, Commodore of the WCIB Sailing Club, looks forward with anticipation

Inter-Livery Clay Pigeon Shoot Michael Llewelyn-Jones, Middle Warden, knows there is talent out there

The WCIB Sailing Club is starting its third season. As promised, we have more regattas and socials planned for you.

The season kick kicked off with the first monthly social in Central London, at The Ship, 11 Talbot Court, London, EC3V 0BP in March. The next one will be held there on Wednesday, 14th May from 6pm.

There have been two RYA Dinghy Sailing courses at the Docklands Watersports and Sailing Centre, Level 1 and Level 2.

The Company aims to participate at the Bank Series Regattas, which start on 24th – 26th May with the Bank of England Regatta. Traditionally, the prize-giving dinner will be held at the Royal Corinthian Yacht Club of the Isle of Wight, Cowes. We have much enjoyed these in previous years.

After that, the next racing opportunity will be on 28th – 29th June at the Portcullis Regatta.

July and August will be filled with few outings for cruising purposes across the British Isles – please express your interest if you would be interested in coming aboard.

The last two regattas in the series – the Spread Eagle Regatta and the John Lewis Regatta – will be held on 30th – 31st August and 11th – 12th October respectively. All regattas named above are held in the Solent.

Should you be interested in taking part in any of these regattas, cruising opportunities or training courses, please express your interest to me or a member of the Club to not miss the boat!

This Year’s Inter-Livery Shoot will take place at Holland & Holland’s ground in West London, on May 21st. Most of the Shots from last year are eager to revisit their scores but we’d welcome more Members/teams of four.

Please contact Gaye if you’d like to shoot – the quality of shooting is very variable so all standards are catered for……….The cost is £160pp, which includes breakfast, cartridges, and a very excellent and collegiate lunch; in addition to raising £7,800 for Charity last year.


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Some Light Relief

My Favourite Restaurant

Frank Moxon

Why travel? I recommend Hunan, 51 Pimlico Road, SW1. Giles Coren, in The Times, said “I have long accepted that it may be the best Chinese restaurant in the world”. I once took some senior managers from Sinochem, one of China’s state oil companies, there. Only then did I discover, as I recall it, that the family (father, mother, son and daughter-in-law) who own and run Hunan are from Taiwan. Nevertheless, the food overcame any diplomatic issues. The most remarkable thing about Hunan is that it has no menu. Having declared first what you don’t like and second how spicy you like it, you will be served a succession of delicious and original dishes in small sharing portions until you surrender. A customer for over ten years, I am still captivated – the food is so good I eat fish and vegetables there and actually like them. Beat that!

Alan Ramsay

Alyn Williams opened his eponymous restaurant at The Westbury Hotel on Conduit Street in 2011, routing by way of Petrus, Restaurant Gordon Ramsay and Marcus Wareing at The Berkeley, where he was Head Chef. Early testimony to his success came in the form of the Michelin Star he was awarded in 2012, since when Williams has increasingly enjoyed a loyal and appreciative following. The Restaurant decor befits its 5-star hotel surroundings and its muted lighting and soft

furnishings convey an elegance which is entirely appropriate. A large, climatically controlled, glass-fronted display case serves as a focal point of the dining room and offers a visual prompt to the quality of the wine list. Williams has a reputation for some acutely developed culinary instincts which appear well-deserved: think sea bass with girolles, crayfish and fresh hazelnuts or Orkney scallop ceviche with watermelon, grapefruit and cobnuts. Well-judged flavours and technique combine with elegant presentation and refinement. What impresses further however is the quality of service which is all one would expect from a restaurant of this standing while also being refreshingly lacking in stuffiness. Michelin-starred fine dining at its best.

Max Asmelash

Kai Mayfair, this Michelin starred little gem located in the heart of Mayfair, South Audley Street, is most probably the best Chinese restaurant in London. Upon entering, you are welcomed with a subtle aquarium, to ensure you are relaxed. The setting is quite intimate, with huge prints of oriental ladies’ faces with the right level of lighting, to create an atmosphere to get your taste buds going. Boasting a growing list of prestigious awards, you can only expect excellence from the Menu, ranging from Pan-fried Foie Gras to exotic soups infused with spices. I enjoyed lettuce-wrapped Crispy Mongolian Lamb for my starter, or why not try the fish version, named the “A Nest of Imperial Jewels” which is chopped prawns mixed with mustard greens which will truly heat you up for the main course. I immersed myself with a classic Duck dish, which comes in two styles, the “Roasted Peking” and “Aromatic Crispy”, believe me, this place will leave you, wanting to come back.


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The City Quiz – Part TwoCourtesy of the Guildable Manor

The Editor will present a bottle of champagne to the member with the most correct answers sent to the Company’s Office by 31 May 2014 by email to [email protected] or post, marked for the attention of the Editor, International Banker. In the event of a tie, the winner will be selected by lot. The Editor’s decision is final!

1. For which bridge is the City Bridge Trust responsible?

(a) Southwark □(b) Blackfriars □(c) Westminster □(d) Tower □2. Which of the following markets is the City

Corporation not responsible for ?

(a) Smithfield □(b) Billingsgate □(c) Covent Garden □(d) Leadenhall □3. Which Gate House of the City is still standing?

(a) Newgate □(b) Bishopsgate □(c) Temple Bar □(d) Holborn Bar □

4. Which Railway Station has an entrance outside the City?

(a) Liverpool street □(b) Farringdon □(c) Fenchurch Street □(d) City Thameslink □5. Which of the following is not a river in the City?

(a) The Fleet □(b) Langbourn □(c) Walbrook □(d) Thames □

6. Which Tube/Underground Station is outside the City?

(a) Aldgate □(b) Moorgate □(c) Mansion house □(d) Westminster □7. Which road is outside the City?

(a) Crutched Friars □(b) Bevis Marks □(c) Chichester Rents □(d) Austin Friars □

8. How many Churches are there in the City (excluding Cathedrals, Synagogues and ruins)?

(a) 23 □(b) 33 □(c) 43 □(d) 53 □9. Which of the following Churches do not exist?

(a) St Andrew’s by the Wardrobe □(b) St Lawrence Jewry □(c) St John the Decollate □(d) St Vedast alias Foster □

10. Which of the following are outside the City?

(a) Middle Temple □(b) Gunmakers Hall □(c) Child & Co Bank □(d) Staple Inn □


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11. How many terms as Lord Mayor did Richard Whittington serve?

(a) One □(b) Two □(c) Three □(d) Four □12. Which of the following English Martyrs was born

outside the City ?

(a) Thomas More □(b) Edmund Campion □(c) John Fisher □(d) Thomas a Becket □13. How many monuments does the Duke of

Wellington have in the City?

(a) One □(b) Two □(c) Three □(d) Four □14. And Lord Nelson?

(a) One □(b) Two □(c) Three □(d) Four □

15. And Queen Victoria?

(a) One □(b) Two □(c) Three □(d) Four □

16. Which Queen has a statue outside the West Doors of St Paul’s Cathedral?

(a) Mary Stuart □(b) Elizabeth I □(c) Anne □(d) Victoria

17. Which Queen of England has a statue in Fleet Street?

(a) Mary Tudor □(b) Elizabeth I □(c) Catherine of Aragon □(d) Ann Boleyn □18. And which King of England has a statue in the City?

(a) Alfred □(b) Henry VIII □(c) Edward V □(d) Richard I □

19. Which of the following journalists does not have a statue in Fleet Street ?

(a) Samuel Johnson □(b) Edgar Wallace □(c) TP O’Connor □(d) Alfred Harmsworth □20. Where is the seventeenth century camera

obscura in the City?

(a) St Paul’s Dome □(b) The Tower of London □(c) The Monument □(d) Bethlem Hospital □

The City Quiz – Part Two (cont.)


49

A PoemBy the Editor

Noses

What fun I’ve had since I started my research!

The streets are full of them.

Small, large, narrow, flat, thin, fleshy

even round and squashy.

A whole vocabulary – retroussé, bulbous, equaline -

no two are the same.

And then I wonder about their owners.

Do noses say who we are?

Do they create expectations?

And yours?

I have taken mine for granted.

It fills my lungs – even underwater in a mask,

it filters out the harmful City chemicals,

it holds up my glasses so I can see,

it delights and appalls me with its smells.

How should I show my appreciation?

Why should only hair, eyes and teeth receive attention -

even moustaches have their annual glory moment.

Should I give it an affectionate rub, or

put cream on it at night ,

(not just on the beach)?

even start a nose appreciation society, or

a nose cleaning and polishing service?

Front Cover Photograph: The Annual Banquet 2014 at the Guidhall (courtesy of Jeff Jones)

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The International Banker Spring 2014

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