Scam

Who is to blame for the credit crunch? The chairman reckons everyone has a bit of dirt on their hands. But he is more interested in the talent coming on to the market from Lehman Brothers.

“What newspaper headline would you most like to see?” I asked the chairman of the imperviously-sized investment company Second Coming Asset Management as we enjoyed a couple of bottles of Château Ubbe Strihagen at The Sometimes Mr Kemp There Is No Joke. “Oh, something along the lines of ‘Charitable work brings peerage for fund group chairman’,” he replied.

“I actually meant in a financial context,” I said. “Although wouldn’t your scenario require … well … some sort of charitable work on your part?””Fair point, well made,” conceded the chairman good-naturedly. “In that case, I think it would involve our dear prime minister being tried in The Hague and maybe being strung up for crimes against the economy. What about you?””For much of the last year,” I replied, “it would have been ‘Banks promise there are no more nasty surprises lurking in their accounts – and this time they can actually prove they’re telling the truth’ because I have a bad feeling the current crunchiness isn’t going anywhere until somebody at least admits we’re talking a trillion dollars rather than just the odd hundred billion.

“But lately this all feels to have become a lot more personalised – you know, all those shocked-looking souls with their cardboard boxes, the dashed dreams of early retirement, the run on the Lehman canteen to use up the last of their in-house credit. I mean, it’s not in my nature to feel sorry for investment bankers but this has brought me pretty close.

“So my preferred headline would now be ‘Here’s the full list of people to blame for the credit crunch’.”

“Wouldn’t that be more of a telephone directory than a newspaper?” wondered the chairman. “Before you even get to the likes of Lehman, you’ve got central bankers, politicians, regulators, the muppets at the ratings agencies and, dare I say it, even you journalists.

“Hey – eventually I might even get round to including myself – if I thought I could keep a straight face long enough.”

“All true,” I said. “And indeed this might be a good moment to salute the geniuses at the Treasury, whose proposed special resolution plan for lenders on the brink of collapse has pulled off the impressive trick of uniting bankers, lawyers and fund managers in their hostility towards it.

“However, since this personalising of the crunch naturally brings with it emotion, spite and revenge, let’s just focus on Lehman for now. Obviously there’s the man at the top – and, to be fair, never have I read such a vitriolic leader in The Times as the one that began ‘Ask the reason for the collapse of Lehman Brothers, and you will find much of the answer in two words: Dick Fuld.’

“I grant you, he doesn’t sound like a bundle of fun but surely we can also lay some blame at the door of the board that allowed him to behave like – again to quote The Times – ‘a curious cross between Gordon Gekko and Tony Soprano’. Yet we’d be guilty of negligence of our own if we stopped our little witch hunt there. So into the mix must go product developers, salesmen, anyone with the word ‘securitisation’ in their job description and, of course, the managers who turn a blind eye for too long because while, OK, the boys aren’t strictly playing by the rules, they are bringing in just so much cash.

“Put it this way, almost 25,000 people at Lehman have lost their livelihoods and presumably some were doing a decent job – but others weren’t. So are we talking 50? 100? 500? 1,000? And can we at least console ourselves that they lie awake at night feeling guilty for what they have helped bring about? Or are they kidding themselves they were just, um, obeying orders?””More to the point, how can I get hold of them?” added the chairman. “They sound like just the sort of free-thinking chaps we should have at Scam.”

“Hang on,” I said. “We’re talking about people who have almost broken the global financial system through greed and short-sightedness. Haven’t you learnt anything?””I’m in finance,” shrugged the chairman. “We never learn.”