The Governor of the Bank of England Is Mammon's Archbishop. So What Was He Doing at the Chelsea Flower Show as Guest of a Bank That Has Been Involved in a Huge Scandal? (the Business)

By Hosking, Patrick | New Statesman (1996), June 2, 2003 | Go to article overview

The Governor of the Bank of England Is Mammon's Archbishop. So What Was He Doing at the Chelsea Flower Show as Guest of a Bank That Has Been Involved in a Huge Scandal? (the Business)


Hosking, Patrick, New Statesman (1996)


Sir Eddie George, governor of the Bank of England, made a misjudgement the other day, I believe. No, he didn't accidentally cut interest rates. He wasn't discovered bonking a financial journalist on the carpet in Threadneedle Street (unlike one of his past deputies). He didn't smoke an illicit gasper in the bullion vaults.

All he did was accept an invitation to be guest of honour of Merrill Lynch, the world's biggest securities firm and the main sponsor of the Chelsea Flower Show. At the most fashionable event of the season - invitations to Chelsea these days are even more desirable than to Glyndebourne or Royal Ascot - Sir Eddie and Lady George were guests of the Merrill boss Stan O'Neal.

Nothing wrong with that, you may think, except that only five weeks ago, Merrill Lynch, along with Citigroup, Goldman Sachs and other top firms, were together fined $1.4bn because of what is probably the worst embarrassment to afflict Wall Street in a generation. The banks were accused of routinely persuading their clients to buy shares that they knew were rubbish.

The fines in themselves were peanuts. Citigroup alone makes $1.4bn in profit every four weeks. But the public shame and humiliation, some argued, would persuade the securities industry to clean up its act. Investment bankers would hang their heads. They wouldn't want to show their faces in polite society.

It isn't working out like that. At a New Yorker breakfast the other day, Eliot Spitzer, the New York State attorney general, who brought the banks to book, was asked how much shame on Wall Street his settlement had produced. "I see none," he had to admit.

Most bankers show no remorse whatsoever. Philip J Purcell, chairman of Morgan Stanley, which was fined $125m, has shown astonishing complacency or bluff, announcing at a recent conference that he did not see anything in the settlement that should concern investors. William Donaldson, chairman of the US Securities and Exchange Commission, accused him of "a troubling lack of contrition".

Sandy Weill, the chief of Citigroup, who was personally accused of pressuring staff into giving biased advice, still hoped to join the board of the New York Stock Exchange even after the settlement. It didn't occur to him that it might not be seemly, though he yielded after seeing the outrage.

And Sir Eddie's Chelsea host Stan O'Neal, chairman of Merrill Lynch, which was fined $200m, criticised the settlement in the Wall Street Journal, writing: "To teach investors. …

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