Finance

Every time I hear about a company relocating its headquarters I think of the Marvin Gaye song “Wherever I Lay My Hat (That’s My Home)”. A hit for Paul Young in a 1983 cover version, its hummable melody cloaks an unattractive sentiment, voiced by someone with dubious motives.

The other day, a business in New York mailed a dollar cheque to me across the Atlantic. It was a pretty thing – multicoloured, with an anti-fraud foil hologram – and I admired it for a while before putting it into another envelope and posting it back to a friend in New York to walk up the block and deposit. After a round trip of 7,000 miles, it reached my account three weeks late.

Andrew Hill

The FCA: not to blame for social media caution (Chris Ratcliffe/Bloomberg)

Some British banks have a long way to go with social media. At a conference on Wednesday morning, one institution admitted its tweets were vetted by no fewer than eight different departments before they were sent.

The financial sector’s attitude to social media regulation seems to be a mix of fear and loathing. On a show of hands, only a couple of delegates at the Social Media Leadership Forum, where I was a speaker, revealed they were not scared about using social media, even though most believe it is a great opportunity. In part, this is because companies are waiting for guidance from the Financial Conduct Authority, first promised for early 2014, that the FCA says is now due later this summer. Even after this extended wait, the proposals will be subject to consultation before they are finalised. Meanwhile, other sectors’ social media strategies are evolving at web-speed. Read more

While waiting in a big Manhattan hospital about 15 years ago, I glimpsed the chairman of one of the world’s biggest banks in a consulting room. I never found out why he was there. If he was ill, his employer never said and the man is now enjoying a long and apparently healthy retirement.

John Gapper

Given that financial crises are caused by herd-like behaviour by banks, it is hard to know whether to be encouraged or dismayed by the latest mass shift – away from investment banking and toward retail and commercial banking.

The Bank for International Settlements annual report, published today, finds that one-third of banks that entered the financial crisis in 2007 as wholesale-funded or trading institutions switched to retail banking by 2012 (19 out of the 54 in its sample). Read more

John Gapper

The New York attorney-general’s complaint against Barclays over the way it ran its dark pool seems to contain clear evidence of institutional investors being misled about the amount of “toxic liquidity” provided by high-frequency traders.

More broadly, however, it raises the question of how the original purpose of dark pools – to allow institutions to make block trades away from public markets where they would move the price – was subverted by investment banks. Read more

John Gapper

No-one emerges well from the legal battle between Goldman Sachs and Deeb Salem, its former mortgage trader who claims that his $8.25m bonus for 2010 amounted to severe underpayment. It is no wonder that Goldman tried to seal the documents in what it calls an “utterly ridiculous” case.

The problem for Goldman and other Wall Street firms is that they have encouraged that sense of entitlement among employees – one that strikes almost everyone outside Wall Street as delusional. Mr Salem’s claim is merely an extreme example of a much wider problem.

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Presumably, although he denies it, Brady Dougan considered resigning as chief executive of Credit Suisse this week when it became the first global financial institution since Crédit Lyonnais in 2003 to plead guilty to criminal felony in the US. In any case, he stayed.

The recent history of Britain’s Co-operative Group is so peculiar it is tempting to paraphrase the opening lines of Anna Karenina – “Happy companies are all alike and every unhappy company is unhappy in its own way” – and dismiss it as a management aberration.

Lionel Barber

A speech by Lionel Barber, Financial Times editor, at Hughes Hall, University of Cambridge, May 1, 2014. An accompanying video can be viewed here.

Ladies and gentlemen, distinguished guests, I am delighted to be here tonight at Hughes Hall in the University of Cambridge. This is the prestigious City lecture, but sadly I will not be providing slides. As Lord Acton might have said, power tends to corrupt, PowerPoint corrupts absolutely.

Tonight I want to talk about bankers and banking. These days, bankers are widely viewed as greedy, self-serving, amoral or actually dangerous. Estate agents, even journalists, are held in higher regard.

This past week’s kerfuffle over bonuses and remuneration at Barclays and Royal Bank of Scotland is a reminder that bankers continue to be held responsible for the financial crisis and the economic calamities which followed.

Bankers appear to be living in a parallel universe, where the rewards are far out of kilter with what the rest of society can expect. This speaks to a deeper unease about inequality which explains the unlikely best-seller on economics, Thomas Piketty’s Capital in the Twenty-First Century.

My questions tonight are: Can bankers mend their ways and their reputations? Is there a path to rehabilitation? Read more

Adam Jones

Managers are notorious for prioritising short-term demands when they clash with long-term goals. Research in the US has shown that most executives would shy away from a value-enhancing long-term project if it caused them to miss a quarterly earnings forecast.

How companies can manage such clashes was the subject of a “Strategy Live” debate organised by the Financial Times in London this morning. Chaired by management editor Andrew Hill, the session featured senior figures from finance and industry, who spoke on a non-attributable basis under the Chatham House rule.

Participants used the example of Barclays to launch a broader debate, examining its controversial decision to increase bonuses to its investment bankers even as it – seemingly paradoxically – tried to move to a less abrasive, more long-termist cultureRead more

What is Goldman Sachs up to? The bank has been behaving strangely this week. When Michael Lewis unveiled his book Flash Boys: A Wall Street Revolt , in which he alleged the equity market is “rigged” by high-frequency traders, the bank discreetly lent him support. Then it emerged that Goldman is leaving the New York Stock Exchange floor, selling Spear, Leeds & Kellogg, a broker it bought for $6.5bn in 2000.

Newsweek’s flawed attempt to expose a 64-year-old Californian called Dorian Nakamoto as Bitcoin’s mysterious inventor has come at an opportune moment for exponents of the cryptographic currency. It has distracted from a crisis of trust caused by the failure of Mt Gox, the Tokyo Bitcoin exchange.

Denigrate, imitate, eliminate are the three steps that incumbents typically take to see off challengers using an unconventional business model. But there is a fourth – regulate.

At 78, Carl Icahn shows little sign of retiring, or of becoming more polite. After finally prodding Forest Labs into a $25bn takeover by Actavis, he renewed his attack on eBay this week, accusing John Donahoe, its chief executive, of being “completely asleep or, even worse, either naive or wilfully blind”.