Jason Nissé: The real-time news from Reuters: it's 10 years late waking up to reality

Abbey's stay of execution

When I started in journalism 16 years' ago it was the era when banks were building massive dealing rooms where they could bring together bond, foreign exchange and equity traders, analysts and economists, salesmen and secretaries, and pack them like battery hens in an area the size of a football field.

I spoke to lots of banking technology gurus and there was one recurring theme: how much they hated Reuters. The financial information supplier had a virtual monopoly in certain parts of the market, particularly foreign exchange, and was using its muscle to win business in other areas. "Arrogant", "bureaucratic" and "a bully" were all terms used. Reuters brushed away the criticism and carried on regardless.

Now, with dreadful figures sending Reuters shares to yet another low, the chickens are coming home to roost.

All those banks that felt they had to buy Reuters products are now realising that they don't need Reuters as much as they thought. Some are cutting down on their use of the company's service, and a couple of large City firms are thinking of cutting it out altogether.

On top of this, there is a recession in the Square Mile and on Wall Street. JP Morgan laid off 2,000 this week, joining Merrill Lynch, Citigroup, Goldman Sachs and a host of others in the retrenchment game. When costs are cut, Reuters becomes even less essential.

This might not matter if Reuters were not so inefficient. It operates like the Indian civil service, slowly and with a need to create work for a class of workers who might be better off in the real world. The operational gearing of Reuters is such that if it does not deal with its costs radically and soon, it may find itself fighting for survival.

To be fair, Tom Glocer realises this. He has been trying to sort the group out since he became chief executive a year ago. But he is a decade too late.

Some of us have been predicting problems for ages (if you think I'm just being wise after the events, check out what I wrote about Reuters 10 years ago).

Mr Glocer is trying manfully to strip out some of the layers of inertia that have stopped the group from seeing that its markets are being eaten up on one side by Bloomberg and on the other by the internet, where you can get for free so much of what Reuters charges for.

But why didn't others spot the problems? After all, the Reuters chairman is Sir Christopher Hogg, supposedly one of the great brains of British business (though his reputation took a bit of a battering during his time as chairman of Allied Domecq). Some shareholders are saying Sir Christopher should go and make way for someone more dynamic.

He has been at the top of Reuters for 15 years. And he has let a situation that might have been soluble in the early 1990s get worse and worse and worse.

Like so many things at this husk of a great company, getting rid of Sir Christopher would be far too little, far too late.

Abbey's stay of execution

Abbey National could do with a few more days like Friday. In the morning it unveiled its exciting new chief executive, former UBS boss Luqman Arnold, and in the afternoon Bank of Ireland threw in the towel and admitted it couldn't mount a bid for the troubled mortgage bank.

But is it all good news? Mr Arnold is a curious proposition to be running Abbey National. An Indian-born bean counter, who rose without a trace within Swiss banking before emerging as the president of UBS, Mr Arnold fell out with power brokers within the bank when he tried to rein in its aggressive lending. He was right, but by the time this was proved to be so, he was out on his ear, having lasted just eight months.

Whatever his pedigree, even he would admit he knows little about retail financial services in the UK. Neither, for that matter, does Stephen Hester, the former CSFB investment banker who is Abbey National's finance director.

They are fighting a bitter battle with five experienced rivals on the British high street. Having seen off two potential bidders, the Abbey National folk will be thinking they have bought themselves some breathing space.

But the next bid may not be too far away. Mr Arnold must hope that his tenure at Abbey will be longer than at UBS. But if the right suitor offers the right money, he could be proved wrong.

j.nisse@independent.co.uk