BANKING ON TOM CHAPTER 5

 BANKING ON TOM CHAPTER 5

 

A CUNNING PLAN    MONDAY

 

Steph was enjoying the interest she had aroused in young Brian in accounts. She was aware of Brian’s eyes wandering towards her blouse. He had never seen her out of her navy blue uniform other than at the Christmas Party. He had got very drunk very fast at the open bar. He had attempted to give Steph a messy kiss on the lips. She was partly amused, partly annoyed it had taken him alcohol to get some courage. She explained she was old enough to be his mother, or at least his mother’s younger sister. Brian insisted she was the finest woman in the office, a real woman if she knew what he meant.

 

She caught his eye and smiled ‘Now young man, more focus on the figures in your spreadsheet’ and she gave him a playful push. He smiled bashfully. ‘Why does everyone call me young Brian?'  he enquired. 'I’ll be twenty-two next birthday.'

‘We’ll call you old Brian once you hit that milestone, she offered ‘but in the meantime you and I have lots to do over the next few weeks. So no holidays allowed before the end of the accounting year at the end of March’.

Brian tried to feign horror but was secretly happy that he was valued and that he would be spending a lot of time with Steph. Steph reasoned the next few days would age all of them.

 

Tom put his head round the door about seven o’clock. Steph enquired if he was taking a half day. He surprised her by suggesting a quiet drink in the hotel round the corner in the Mont Clare. In their early days of working together the Banking team often used to go for a drink after work. But then drink driving had been introduced and the young people became the middle-aged people with mortgages and families.

 

They picked a quiet dark corner faraway from a scattering of the younger staff who were getting noisier as the evening wore on. Briefly he ran over the Board Meeting and some of the possible implications. Both Steph and himself would be financially ok. But they were both proud of what they had created against all the odds and against stiff opposition. Both had given twenty years of their life to the Bank, for what? Even in circumstances where the Bank was sold and the staff were retained, life would be vastly different. In a sense there was little to distinguish between liquidation and takeover.

 

Steph valued Tom. He was always good in times of crisis. She admired him over the years when clients would come in and explain that the game was up. Their business had failed. They had run out of rope.  They had invested decades of blood, sweat and tears. They were often emotional and depressed. Tom would bring them round the corner for a stiff drink. He would explain it was only money. ‘Didn’t they still have their health and family?  Not to feel too bad about the Bank. It would be fine. They had done their best. There was nothing to be ashamed of. Often he pointed out it was a question of bad luck or bad timing’

 

However there was nothing that could have prepared Steph for the plan that Tom laid out.

 

Tom explained how London wanted Dublin to trade. So he would give them trading. And some. Bigger and bolder than they could imagine. He would arrange for IBB to take a massive position in the dollar next Friday week the 28th. He had noticed a pattern in the trading every Friday around midday when the London market closed its position and just as the US investment houses were starting to trade. The same pattern repeated every week. No one seemed to remark on it on it. Money brokers in London and Dublin headed as they did every day to the wine bars to celebrate their wins or drown their losses. Brokers in New York were arriving at their desks and drinking their first coffees in a haze of tobacco smoke. 

 

IBB would buy into the short-term weakness and drive the price up. The US Banks would take their cue and continue the buying spree for fear of missing out. IBB would unwind its position over the period of an hour. Instead of buying physical dollars IBB would buy contracts for difference which magnified the activity by a hundred-fold. It was a highly risky process. It could make tens of millions or wipe out a bank.  This form of trading was particularly strong in the Asian markets naturally attracted to risk and gambling. Fortunately Asia would be asleep and the night owls simply minding the shop. The IBB  risk would be underwritten by insurance companies who were offering protection at very fine rates.  Tom had noticed that insurance companies had been mispricing risk, believing that because nothing had gone wrong in the past it would never happen in the future. Things would be fine, until they weren’t. IBB needed three components – additional outside equity, enormous dealing limits and underwriting by insurance companies. Tom was fairly confident that he could source all three.

 

Among the thousands of trades a small Singaporean company would earn a small fee repeatedly which could come to five or six million dollars depending on the volume. That company would be owned by Tom, Steph and Maura. None of the three would ever have to work again. Some countries would turn a blind eye and expected such behaviour. Other countries would put the principals in jail  And Tom didn’t wasn’t to consider what might happen if they ended up in China. But here was little fear of that as they did not intend to deal with any Chinese Banks. They would not be exposing the Bank to any more risk than London had been asking. If this scheme had be introduced by an independent broker, the Bank would have no hesitation in the agreeing the fee. Tom had come up with a name for the offshore account.  ‘Marstom Partners’ sounded sufficiently exotic and anonymous.

 

Steph was not happy that Maura was party to the scheme. She did not like or trust Maura. Tom had foreseen Steph’s understandable reluctance to Maura forming part of the team. Tom explained that one of the three legs of the table was getting permission from Compliance in London and Dublin to the temporary trading limits. Maura would have to speak to Ben as ‘nicely’ as she could. Steph grimaced and then smiled on seeing the delicious irony of it all. As always, the bulk of the work would fall on Steph’s shoulders. There would be thousands of book entries to be completed Friday week. By the end of business on Friday 28^th February every position need to be closed out and every cent accounted for. Whether the scheme worked or failed it would be subsequently examined forensically.