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Banking on a pause

Today that world is in eclipse. As governments bail out banks, capping executive salaries, and criticism of Wall Street and City lifestyles reaches a crescendo, banks will retreat into the shadows, writes Karan Thapar.

india Updated: Oct 18, 2008 22:55 IST

My introduction to investment banking happened in rather unusual circumstances. It was the second day after our marriage and Nisha had agreed we would attend her office Christmas party. Being somewhat adventurous, I accepted. Little did I realise what I would encounter or how it would change my life. Of course, it started rather deceptively.

“What are you wearing this evening?” It was 7 am and I was still struggling to wake up. Nisha was standing in front of my cupboard examining my clothes. I can’t remember my reply but it did not impress her.

“I suggest your dark navy suit. I’ll give it to the drycleaners on my way to the office and you can pick it up when you return.”

She then started rummaging through my shirts and ties. “Is that all you’ve got?” This time she didn’t wait for an answer. “Never mind, I’ll pick up something suitable at lunch.” And then, with a “Don’t be late, we’ve got to be there by 6.30”, she was off.

That evening I discovered why Nisha was so concerned about my appearance. Her colleagues were in expensive, well-cut, dark suits. They wore Hermes or Ferragamo ties. They smelt of expensive lavender and vetiver perfumes. They had an air of cultivation unknown to the journalist circles I inhabited.

Nisha was a merchant banker, as investment bankers in London are called. Her day began at 7.30, a good two hours before mine. She usually got home after I did. But if Nisha’s tribe worked hard they also knew how to have fun. They took their clients to the choicest restaurants, maintained boxes at Covent Garden and Glyndebourne, kept up with the latest plays, joined the best gyms, drove expensive cars and week-ended in Paris.

As her husband, I often accompanied Nisha. At first, it was unsettling. She and the male guest, usually a corporate chairman or a senior government official, would talk shop. His wife and I would be left to get on as best we could. But such was the charm of this good life, I learnt not to care. And, anyway, it doesn’t take a journalist long to steer the conversation towards subjects where bankers are naturally curious and hacks good at holding forth!

Our life flourished on the strength of Nisha’s perks and her spiraling career. We bought our first home with her 2 per cent mortgage. Our first car was a BMW from her office. Because driving to the City was maddening and parking impossible, it was all mine. I must have been the only researcher at LWT who showed up in a 325i. And we had a maid. Of course, she didn’t came daily, but even twice a week Signora Costa was spoiling.

In five years flat Nisha was head-hunted three times. She first moved to Manufacturers Hanover, then Merrill Lynch and finally, as a managing director, to County NatWest. By 1988, when she was still 33, if you included her bonus, she was earning in the hundreds of thousands. It was 8 times my salary!

Merchant bankers can rise like rockets. Of course, they can also fall like shooting stars. I knew several who lost their jobs without notice or forewarning. It’s a fear Nisha lived with all the time.

In the 90s and the 2000s, a merchant banker’s life became yet more exotic. They moved into a different orbit altogether. Their salaries leapfrogged, scaling the millions and even touching the tens of. But the nervous juxtaposition of high reward and extreme risk remained its hallmark. Both in terms of what they did and what could happen to them, they oscillated between euphoria and dread.

Today that world is in eclipse. As governments bail out banks, capping executive salaries, and criticism of Wall Street and City lifestyles reaches a crescendo, banks will retreat into the shadows. The joy of flaunting will give way to discretion, if not anonymity.

But, take my word for it, the sun will shine again. Of that I’m certain. It may not happen for years but these clouds will clear. As Nisha would have said: “You can’t keep good money down!”