BANKING ON TOM CHAPTER 2

 BANKING ON TOM CHAPTER 2

STRATEGY GOOD AND BAD         MONDAY

 

Ben Osborne was not feeling altogether pukka. Even the sight of Michelle, the gorgeous au pair beside him in bed did little to lift his spirits. A bottle of Gran Reserva the Sunday night before, washed down with a generous single malt hardly helped. Ben had become increasingly worried about the new trading activities of British Business Bank. As head of strategy the trading section technically reported into him. He was finding it increasingly difficult to explain to the Board the nature of the trades the bank was executing. It was little comfort that very few knew either, certainly no one in the Boardroom. While minor matters were challenged robustly by the Board, the trading activities of which everyone was ignorant were approved in little time, reassured by the ‘experts’ that risk has been minimized. Banking had entered a bright new world of enormous profits with no downsides. A goldilocks financial paradise. Board members enjoyed their comfortable lunches and looked forward to generous bonuses which their wives or mistresses had already spent in many cases.

 

He found little consolation in the complex explanations offered by Robert Lyons, the Head of Trading. He would provide mathematical formulae which ‘proved’ the deals were safer that ‘lending to our granny’. Ben thought Robert obviously didn’t know his granny. Most people regarded Ben as shallow, and in many ways he was. But he had developed a gut instinct for business that had served him well for over three decades. He trusted his instincts. And they were screaming. Like most business men he relied on the theory that everyone else was doing it. But he still worried. He looked across the golden mile in London and most investment Banks were doing the same and even more furiously. The fear of missing out was strong and affected the Board members more than any others.

 

He was under pressure to make the Dublin office perform, or shut them down. They were regarded as a disappointment. Profits rising at ten percent a year no longer cut it. In a moment of desperation he had appoint the fair Maura. He wasn’t exactly sure why. She talked a good talk. She spoke of golden opportunities and moving the Dublin bank into the twentieth century.  IBB needed thinking outside of the box.

 

He had hardly appointed Maura when he realized it had been a mistake. But he reckoned there were bigger fish to fry. Indeed her tenure might be shorter than expected if the London Board acted on its instincts.

 

Michelle the 'au pair' was now awake. She made her way down to the kitchen. The children she was minding were in Switzerland on a school half term. She was free to do whatever she wanted. She was amazed that Ben’s wife Diana was so laissez faire. She lived in Geneva where she ran a successful art gallery. Diana was independently wealthy and had grown tired of playing wifey to Ben a decade ago. Her friends were wealthy, international art lovers. Banking was regarded as a grubby occupation and very bourgeois by her friends. It suited her to have Ben as an establishment cover. She was happy to turn a blind eye to his numerous flings as long as he kept the affairs discreet and did not leave himself open to blackmail. 

 

Over breakfast Ben looked across at Michelle. He was no fool. He realised his good looks were fading as he approached his half century. His ‘spontaneous’ gifts were having to become more numerous and expensive. He knew the script. Within months or perhaps even weeks, Michelle would find someone younger or wealthier or both. The charade would continue for a little while longer until one or the other called time. In the meantime she was enjoying the attention of a generous man. Something she would not have imagined in her native Nantes.

 

‘Not this morning Josephine’ Ben quipped. Michelle looked puzzled. Ben explained the British perspective on French history. ‘How about a cup of that wonderful coffee?’ Ben enquired ‘and throw on a dressing gown so as not to frighten the dogs.’

 

They sipped their coffees in silence. Ben was grateful for the period of quiet. He needed time to plan the day ahead. He had to find a solution to the Dublin situation and time was running against him. His bright idea of hiring Maura had not worked out. It was only a matter of time before his poor judgement would be exposed. ‘It’s always the small things that get you in the end’ thought Ben. Switching her to compliance bought him some time, but not a lot. In any event he had bigger problems. The London Board was annoyed that the lads and lassies in Dublin had basically refused to up their game. This could not end the well.

 

A few miles away Arturo Fernandez stood by the floor to ceiling window of the opulent apartment overlooking the River Thames. He had greying hair and a handsome profile. The son of a wealthy family of Spanish descent in the city of Monterrey in the north of Mexico. His family had old money that could be traced back over many decades. They owned a vast sprawling ranch boasting a magnificent main residence with many adjoining houses for family and workers. They had extensive industrial interests in Monterrey from industrial gases to carbonated water. It was suspected they had links with the narcotics trade. But nothing had ever been proved and there were no witnesses, alive at least. Like many wealthy Mexican families he had chosen to invest abroad. The family owned some apartment blocks in Miami Florida. But Arturo was drawn to Europe above all.

 

Arturo had invested well and wisely in the London property market from the seventies onwards. The properties were all held in overseas trusts on the advice of a young banker he had met twenty years ago. He had met Tom Nolan in the seaside town of Cuernavaca on the Pacific Ocean six hours from Mexico City. Tom and his recently married wife Janet were on their honeymoon. Tom was at the bottom of the corporate ladder. His chatty bride Janet worked for Aer Lingus, the Irish national airline, which permitted a generous amount of travel for herself and family. And so they found themselves a long way from home when Tom and Arturo struck up a conversation in the bar. Tom had a few words of Spanish from his time teaching English in Malaga during University holidays. Arturo spoke flawless English like many top Mexican businessmen.

 

Tom impressed Arturo with his humility and his knowledge of offshore banking. He wore his learning lightly, explaining everything simply. Arturo found it refreshing. His usual tax advisors made such a fuss of everything, making it overly obscure and complicated. To protect their jobs and over inflated fees. Tom recommended simple handsome properties in leafy west London whereas others were recommending dodgy oil deals in landlocked countries in central Asia, gambling casinos in Macau, diamond mines in Africa. Never simple. Never transparent. Full of middlemen who had to be paid to gain access to the deals shrouded in secrecy.

 

The Irish had good press in Mexico from the time of the San Patricio’s, a group of Irish soldiers who served in the American army in the nineteenth century and who changed sides. They fought heroically and unsuccessfully with the Mexicans, seeing in the Mexicans a people with a similar Catholic faith oppressed by an Imperialist American war machine. America took over half the land of Mexico. Memories ran long. Over the intervening twenty years Tom had diligently risen up the corporate ladder and the London investments of the Fernandez family prospered in good times and in bad. They had scored a number of spectacular lucky wins. Some unattractive sites adjacent to their main properties were the subject of intense bidding wars.

Over this period Arturo offered Tom money, a lot of money. With no strings attached. He was stunned when Tom gently but firmly said ‘no’. Arturo did not know of many bankers who would say ‘no’ to some money in a well disguised bank account in the Caribbean. 

 

Arturo’s commitment to Tom was complete. He had turned down the overtures of Ben Osborne at lunch the week before. Ben implored Arturo to move his tens of millions of deposits from Dublin to London, from puny IBB to swashbuckling BBB. Ben damned the Dublin operation with faint praise, even slyly suggesting the Dublin operation was for the chop. London on the other hand offered a safe haven and the possibility of joining in lucrative deals with their treasury team. All profit, no risk. It seemed too good to be true. Arturo knew how to play the long game and promised Ben he would give it consideration and run it past his younger brother, Santiago also known as Jimmy, the English equivalent. It was not unusual for wealthy Mexicans to adopt the English variations of their names. Jimmy was arguably the brightest in the family. A trained accountant and tax specialist. Arturo would never take a decision without Jimmy’s blessing. Besides they were due to meet the following Monday in the opulent offices of BBB. The world was full of robbers and none more than in the Square Mile in London. Jimmy dressed in pinstripes and oiled is black hair like a matinee idol. He was nobody’s fool. Arturo enjoyed the lavish meal. Ben was a consummate host. Arturo was under no illusion. There was no thing as a ‘free lunch’. Ultimately the client paid for everything. Ben’s generous salary and bonus, his massive pension pot and yes, the meal they were eating.

 

Arturo missed the fun of the simple meals when the couples met twenty years ago, before Janet’s problems became evident and ultimately prohibited a civilized meal. Arturo’s wife Maria, had not given up on Janet and remembered to send birthday and Christmas cards. As for Ben, his wife Diana was never about. Over in Geneva selling overpriced art to people who might have thought themselves wealthier than the Fernandez family. Ben had made the big mistake some years ago of bringing along a girlfriend to dinner. Maria did not approve. She spoke with Arturo who discreetly spoke with Ben and no strange women made another appearance. Maria was staunchly Catholic. Besides she did not want Arturo to get ideas. The Fernandez family saw some friends marriages disappear as they drowned in a lifestyle of money, pleasure and all too often drugs. 

 

Later that Monday morning Arturo and Jimmy were chauffer driven in their comfortable Bentley to BBB offices, a handsome building in an affluent Georgian Square. The Bank building was handsome yet discreet. It was not open to the public and did not advertise its existence. One did not approach BBB. They approached you. Every meeting was by appointment. The handsome main door opened to a generous reception hall where hung some very expensive art including paintings sourced by Ben’s wife, Diana. The artwork alone was worth millions and cost a fortune to insure. One wag suggested the art was worth more than the Bank. The art had certainly performed better than some of the trades dreamt up by Robert Lyons, Head of Trading in BBB.

 

They were ushered into the boardroom where they were greeted by Ben and Robert. Ben had sobered up and looked the epitome of a successful British Banker. Robert on the other hand looked like a Wall Street trader. Garish shirt and the customary trouser braces. Robert was a young man in a hurry who always wanted to be somewhere else. He yearned to be away from a fusty British Bank and to work for a ‘real’ bank. Meaning a US investment bank where a bonus ran to millions not merely hundreds of thousands. His aggressive trading had caught the attention of rivals. He needed to move while his luck held out. He was painfully aware the short shelf life of a trader in the financial jungle. 

 

He had reluctantly joined the meeting at the request of Ben who was technically his boss. Ben was hoping that Robert might impress the Fernandez brothers and encourage them to partner with BBB whose year end was March 31^st and bonuses would be shortly struck and allocated. Robert quickly lost interest. He could see the Fernandez were not really interested. They were being merely polite. Robert on the other hand was not polite or patient. He quickly made his excuses explaining a trading situation that needed his attention. Ben was embarrassed. Arturo tried to ease Ben’s discomfort by feigning interest in the document carefully prepared for the Meeting with logos of BBB and Fernandez embossed on the cover. Arturo was always careful not to allow the other party lose face. It was a long road that didn’t have a turning.