The economic benefits of the long boom in the City of London are clear: The financial sector contributes 10 percent to Britain’s gross domestic product. But the conspicuous displays of consumption — £44,000 wine tabs for bankers in their £20 million and £25 million homes bought by hedge fund executives — stick more firmly in the collective craw as mortgage companies collapse and short-sellers circle.
“We have all gone to this temple called money,” decreed the Archbishop of York at a dinner last week put on by an aptly named trade group, the Worshipful Company of International Bankers. “We have all worshipped at it. No one is guiltless.”
Indeed, this resistance to the brazen ways of financiers dates back more than 100 years, to the late 19th century, when the landed English gentry expressed their revulsion at the spendthrift ways of plutocrats from abroad who suddenly appeared at the dinner tables of British country homes.
“There might as well have been a Goddess of Gold erected for overt worship,” one hostess was quoted as saying in The Decline and Fall of the British Aristocracy by David Cannadine.
Some peg the rise of the bonus culture to 1986 when fixed commissions were abolished and the doors opened for US brokerage houses to set up shop in London. Subsequently, the idea of banks taking on more risk and getting paid for it became widespread.
“There was none of this frantic trading and multimillion payoffs,” said George Blakey, who worked as a stock broker in the City from 1966 to 1990 and has recently written a history of the London stock market.
“The function of a stock market was to raise capital for industry. But then our old companies were taken over by these big pushy banks and it all became a crazy capitalist casino,” he said.
Still, even with the outcry over bonuses, the British financial scene remains devoid of a human symbol to define the public distaste.
While Diamond may come across as more assertive than most on the City’s stage, his habits and attitudes pale in comparison with major figures on the other side of the Atlantic. He has not thrown himself a US$3 million 60th-birthday party, as did the buyout king Stephen Schwarzman, chairman of the private equity firm Blackstone Group. That event in February of last year came to epitomize an era of excess.
“We have a prudish attitude toward people making too much money,” said Stuart Fraser, a top official at the City of London. “But our financial services industry has to remain competitive. We can’t have heavy-handed regulation.”
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