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Published by: Financial Times Ltd,


Bracken House, 1 Friday Street, London EC4M 9BT


+44 (0)2f0 7873 3000 www.pwmnet.com


Staff members can be contacted by dialing


+44 (0)20 7775 followed by their extension number.


awareof the financialecosystem beyondthe‘onebank’marketing mantra.“All seniorbankersshould spendtimewiththemostjunior marginclerkswholiquidate client positions in securitiesand commoditieswhenamargincall arises,”saysMrCornwall.“Thefancy algorithmsandsoftwarethebanksuse arenomatchforcommonsenseand decisiveleadershipactions.”


LUCRATIVEDEALS This debacle comes hard on the heels of losses to the bank’s ultra- wealthy clients, offered funds fromsupply chain finance firm Greensill Capital, currently under intense media scrutiny due to the involvement of formerUKprime minister David Cameron in lobbying government ministers for access to a Bank of England coronavirus loan scheme. Wealthyclientswere sold the


funds,whichhada$1.2bnexposureto SanjeevGupta’s troubled steelempire. “Bankersworkingwith familiesget introducedto deals theyfeel pressured to raisefundsfor,andthat’swhen the real trouble starts,” says Cara Williams, senior partner for the family offices segment atconsultancyMercer. Herwarningsringparticularly


poignanttothoseclientswholost fortunesto the fraudulent$68bnPonzi schemeoverseenbyBernieMadoff, whodiedrecentlyinaUSprison.His “investments”wereinadvertently facilitatedbymanyprivatebanks. WhileCreditSuissedidnotrespond


toPWM’s requests to discussthese issues, all theformerbankersand consultantswespoketo highlightedan aggressivesales culturein investment banks, enticingrelationshipmanagers toseekthemostlucrativedeals, withoutadequatesafety nets. The ‘one bank’ structure facilitates these activities, but it has feathered


See coverage of PWM’smoral leadership and diversity survey, beginning on page 22


toomany nests to be cast aside. Andit is thriving stateside,with adherents JPMorgan andBankof America currently in the ascendancy. It isEuropewhere problemshave festered, withcosy networks binding families, advisers,banks and politicians together. Dysfunctionalcoteriescanprove financiallyruinousforbanks, clients, governmentsandsocietiesasawhole. Arootandbranchreviewof leadership failures is surelycreepingupthe regulatoryagenda. It istheabsenceofanadequate


“managementbandwidth”tooversee the biggest dealswhichhasbeenmore crucialthananystructural deficiency, saysAminRajan,founderofthe Create-Researchconsultancy.While seniorheadshavealreadyrolled,the “revolvingdoor”atthehelmofmajor banksshouldbecalledintoquestion. AsPWM’s surveyondiversity


andrecruitmentshows, integrity, competenceandcompassionare keycomponentsofmoral leadership in privatebankingandasset management.Buttherearealso rivalpressures bearingdownonour leaders, frombothshareholders andclients.Wealthmanagementis traditionallyalowmarginbusiness. Aggressivecross-sellingnotonly allows privatebankstoboost these profits,butit givesthematighterhold onthe biggest clients,whoselackof loyalty theyconstantlyfear. ForCreditSuisse, storiesofpast


successesmaynotbeenoughtoputthe Zurichgiantbackatthetoptable.There havebeenrumoursformanyyearsof amergerorrescuebyZurichrivalUBS, althoughbothUSandSwissauthorities mayblocksuchamove.“Alloptionsare nowonthetable,”suggestsMrRajan, witha“miracle”neededto returnthe bankto its formerglories.“CreditSuisse facesaHerculeantasktoreviveits fortunes.”


Editor-in-Chief Yuri Bender


yuri.bender@ft.com Deputy Editor


Elisa Trovato 6374 elisa.trovato@ft.com


Group Chief Sub-Editor


Elliot Smither 6379 elliot.smither@ft.com


Deputy Production Editor


Nicholas Bunce 4318 nicholas.bunce@ft.com


Contributors Michael Blake


Caroline Burkhart Jenny Kvaskova Malik Sarwar John Younger


Advertising Adrian Northey 6333


Global Business Director adrian.northey@ft.com


Andrew Campbell 6865 Projects Director


andrew.campbell@ft.com Head of Marketing, Audience Marketing


Raj Rai 6340 raj.rai@ft.com


Marketing Manager, Audience Marketing Dimple Khatri


+44(0)20 7873 4028 dimple.khatri@ft.com


Managing Director Matt Fottrell


Design


Kostya Penkov 3255 kostya.penkov@ft.com


Production


William Baxter 4365 william.baxter@ft.com


Cover photograph Coneyl Jay


Printed by Walstead Group in the UK


Annual subscriptions: £475 | €575 | $775


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©Financial Times 2021


“FT” are registered trademarks and service marks of the Financial Times Ltd. All rights reserved. No part of this publication may be reproduced or used in any form of advertising without prior


permission in writing from the editor. No responsibility for loss occasioned to any person acting or refraining from acting as a result of material in this publication can be accepted. On any specific matter, reference should be made to an appropriate adviser. Registered Office: Bracken House, 1 Friday Street, London, EC4M 9BT


The Financial Times adheres to a self-regulation regime under the FT Editorial Code of Practice: www.ft.com/editorial code


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