The Beginning of the End Says the City's Top Player; Optimistic: Power Broker Michael Spencer, Left, in Mayfair Yesterday, and above, with His Close Friend David Cameron at the Great Britons Awards in January

Article excerpt


MICHAEL SPENCER is beaming. "I believe we are now seeing the beginning of the end of the credit crisis," he says. "We need some good news and this is it." He's agreed to see me at short notice to discuss the Government's package aimed at revitalising the banking system. Spencer, 53, the City's richest self-made man and founder of Icap, the world's largest inter-dealer broker, is one of the great modern success stories to come out of the Square Mile.

He is also the Conservative Party treasurer and was a billionaire until the credit squeeze hit the fall in Icap shares has wiped ?483 million off his worth. Yet in the downstairs bar of The George Club in Mayfair he is in fine heart. Looking trim and relaxed and dressed casually in an open-necked pink shirt, he shows no sign of having let the trauma of the past few weeks get to him.

"For the first time, we've seen a coordinated response and that is really significant.

We've had coordinated moves on rates from the Bank of England, the Fed, the European Central Bank, Australia, the Swiss National Bank and Sweden.

That's a proper global effort. "That's the first thing that makes me think we've reached a turning point in how we deal with the crisis.

"The second is that we're finally beginning to get ahead of the curve. Hitherto, we've been left behind. But with these capital proposals we're thinking forward.

They should represent a significant step towards restoring the banking structure and returning to the sort of environment that supports a return to banks lending to each other again." Spencer's words will provide muchneeded cheer. He is an immensely powerful and popular figure in the Square Mile, admired for having been a trader himself and for working his way up to the very top. Even now, he likes nothing more than to be out on the dealing floor, sensing the mood, watching the screens and reading the markets. He studied astrophysics at Oxford but for a career chose to rely on his innate skill at making money and speculating at a lunch, he once started a market in the number of lace-up shoes under the table.

He was famous in his early days at Icap for hosting spectacular parties. He's more restrained these days, moving seamlessly between high finance, politics and charity work. He's credited with transforming the fortunes of the Tories and every year, Icap holds an annual charity day when celebrities answer the group's telephones and the day's commissions are donated to charity. Last year, the day raised ?9.2 million. A keen collector of Jack Vettriano paintings, he has homes in Notting Hill, Suffolk and Manhattan.

Recently, he hit the headlines because he separated from Lorraine, 49, his wife for 25 years (they have three children) leading to speculation that the record for a British divorce settlement was about to be smashed. His current partner is Sarah, Marchioness of Milford Haven.

TODAY, he wants to talk about business. Pointing to the individual rescue measures, Spencer says the Government's ?50 billion investment, the extension of the Bank of England's Special Liquidity Scheme from ?100 billion to ?200 billion and the broadening of its collateral facility amount "for the first time in this crisis to a serious effort to rebuild the banking finances".

When I say the US $700 billion package does not appear to have had the desired result, so why should this one work, he nods. "By US standards, we might agree, $700 billion is too modest. Here, the total potential taxpayer liability of ?500 billion is of a much higher proportionate level. It's more significant and it strikes me, is a more appropriate response to the scale of the crisis." Spencer is now looking to the upcoming G7 meeting of the leaders of the world's major economies and to the EU for "similarly substantial moves". Now that the push has started, he maintains it is vital the momentum is continued. …


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.