Culture clean-up follows bankers to the bar

Sun Aug 26, 2012 4:09am EDT
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By Sarah White

LONDON (Reuters) - In the boom years, conspicuous consumption in the bars was investment bankers' natural release from long hours in the office. Now the office sits on their shoulders while they sup.

After a series of banking scandals, banks' compliance teams are ramping up their checks on every aspect of office life, such that even social outings are under scrutiny, with training sessions on what you can and can't say over a beer with colleagues.

"Everyone is more paranoid, that's for sure," said one department head at a European investment bank, where the trading floor is festooned with posters reminding staff to report any suspicious behavior.

At his bank and at least one other European firm, executives said they were being asked to take part in an increasing number of behavioral coaching sessions, including simulations of pub outings.

These were mainly done via webcasts, where participants act out conversations with colleagues where the talk turns to clients or office gossip, two bankers said.

"You have to turn around and say, 'No, let's not talk about that'," said one.

Such simulations and extensive compliance checks, including regular sweeps of emails and phone calls, are part of the new reality since the 2008 financial crisis, as watchdogs like Britain's Financial Services Authority replace their now pilloried light-touch supervision with a more active and intrusive stance.

Successful convictions of individuals for market abuse schemes in the UK have also put bankers on their guard, as have scandals such as the manipulation of the Libor interest rate, a benchmark rate on which trillions of dollars of financial products are based. Barclays PLC is already counting the cost of that scandal - $453 million in fines - and others are under investigation.   Continued...