Russell Taylor's career in finance brought him into contact with enough humbugs and rascals for any one lifetime, and the personal element in his sprightly book is a rueful account of the crimes and follies of that sub-species of mankind, homo pecuniarius. After working in the City and as the City editor of the Observer, Taylor worked for Hambros, then one of the more troubled of the established London merchant banks. And he was then asked in January 1972 to become the general manager of a new institution, the Italian International Bank, established in London by four Italian banks of great antiquity. He threw himself into the work with energy and ambition, persuading the former Governor of the Bank of England, Lord Cobbold, to be his chairman, and a future Prime Minister, James Callaghan, to join his board. In that job he had a front row seat as the Italian financial world was ravaged by Michele Sindona, Roberto Calvi, Archbishop Marcinkus and the sinister masonic lodge, P-2.
After about four years he made the serious mistake of forgetting John Maynard Keynes's maxim that a sound banker is one 'who, when he is ruined, is ruined in a conventional and orthodox way, along with his fellows, so that no one can really blame him'. The IIB was a 'consortium bank', jointly owned by the Italians, and when its losses mounted to the point where these had to be asked to increase their capital subscription, a sacrifice was demanded, and the lot fell upon Taylor.
One thread of the book, therefore, is his account of the IIB. It is an amusing tale of bella figura and well-bred in-fighting by both Italians and Englishmen, with some valuable lessons thrown in. Aside from providing Taylor with a postgraduate course in office politics, however, it also taught him some valuable lessons. Banking was being transformed by information technology, and very few bankers understood the first thing about computers, let alone why they must inevitably destroy the serene round of the traditional banking bureaucracies. The second theme of this lively but badly organised book is the way in which banking has been pillaged over the past 20 years by such 'humbugs or rascals' as Sindona and Michael Milken, by the 'splendid financiers' of the American savings and loan companies, and by BCCI.
Its third theme is more ambitious still. It is in a way a history of the financial world over the last 25 years. Only in a way, however. Not because Russell Taylor lacks the intellectual capacity or the knowledge for the task. On the contrary, his account of those episodes he does tackle can hardly be faulted. He is very good, for example, on the consequences for the world's banking system of the boundless ambition and imperial arrogance of Citibank.
His account of the tragi-comic fate of the Midland Bank is perceptive and wryly funny. It is an infuriating story, of a bank abandoning the essential job it did well, and which it was desperately needed to do - namely the financing of middle-sized companies in the English Midlands and North, and plunging far out of its depth. Out of a mixture of executive vanity and the all-too common inferiority complex of British businessmen in relation to Americans, the Midland made an epic mess of acquiring Crocker National Bank in California.
Crocker was itself at death's door, stuffed with non-performing loans to banana republics and Napa Valley wineries alike, and full of puffed up figures like Tom Wilcox, who liked to be known as 'Atomic Tommy'. How very different were the managers of our own dear Midland . . .
These modest invaders of the global banking stage stood so much in awe of Atomic Tommy and his fellows that even when they had rescued Crocker at a cost of a billion pounds and controlled 57 per cent of the stock, they didn't dare to insist on more than three seats on the board, or on appointing their own man to run their new subsidiary. They did not even ask for their own office in its 38-storey building]
The problem with this book does not lie in the parts of the story that Russell Taylor does cover, so much as the parts he rushes over with breathless haste, flinging out here an intriguing generalisation, here a learned allusion and there a dark prophecy of system meltdown. In places it reads like a monologue delivered by a nervous guest on speed - the poor layman's brain begins to reel.
I have a specific, highly personal niggle, too. The chairman who eased Russell Taylor out of IIB was Rupert Raw. Taylor is hard on him, which may or not be fair. What is not so pretty is that he makes no reference to the fact that the man who has done more than anyone to establish just what did happen in the Italian financial shenanigans of the Seventies was Rupert Raw's son, Charles. To declare an interest, I wrote a book about the Investors Overseas Services scandal jointly with Charles Raw and Bruce Page. The book was called Do You Sincerely Want to Be Rich?
I think it is ungenerous of Russell Taylor to make no reference to Charles Raw, and even more so to use that phrase as the epigraph of one of his chapters without attribution. The book is also poorly copy-edited. It even misspells, twice, the name of one of the banks which jointly owned the IIB. Still this is an entertaining and useful book. It is so well written, and its various theses are so interesting that my only other criticism is that it might have been worth taking more trouble to explain. Banking, after all, is a mystery to most of us. If it wasn't, bankers wouldn't make so much more money than we do. Nor would they live so well even when they make such elementary mistakes as believing that sovereign debt never defaulted or that you could trust Robert Maxwell.Reuse content