Tales from the Vienna woods

Hotel Intercontinental Wien, Johannesgasse 28, Wien, Vienna, Austria

The strangest thing here in old Vienna is how many guys come up to me and ask after our president, old Mr Schicklgruber, they tell me they do not see so much of him these days but they always feel he is misunderstood, they admire the way he builds a second career as a banker, and how is he keeping now he is in his eleventh decade?

What must happen is they read our bank's name off my conference badge and put two and two together, I am here for the International Monetary Conference, not the IMF but smarter, and more exclusive too, just a hundred-odd guys like me who run the top commercial banks, plus Gerry Corrigan from Goldman Sachs, on account we figure he soon may have money to leave on deposit.

In the day we have debates and in the evening we have parties, which are more than something, I never before figure to see Alan Greenspan waltzing in a palace to the strains of the Blue Danube, but the debates are kinda overshadowed by what the guys here call angst, we all wonder how many of us get to meet again, already there are empty saddles in the old corral.

Some guys just run out of road, like poor old Takao at the Long Term Credit Bank of Japan, I finger his term must be up and also his credit, but most of the trouble is mergers, $300 billion of them for the US banks alone, and what happens to the guys on the fuzzy end of this lollipop, well, maybe their stock options work out but for them the Blue Danube is the last waltz.

I am lined up to speak in the IMC's second debate, which is on human resources management in a changing banking environment, Mom, I kid you not, just what we all need to keep us awake after lunch, Andrew Buxton chairs our panel, which features a guest appearance by John Reed, boy, do he and Sandy have human resources problems, like each other, for a start.

So when I get to speak I begin with a short rendition of The Times They Are A-Changin', which goes over well until John tries to whistle it. Sure, I say, change creeps up on us bankers, what with technology and globalization and the euro and Glass splitting up with Steagall, some way may yet be found to disinvent all this but I figure it is too late now.

Change, I tell them, combines badly with the sheep-type gene in bankers, there are bio-engineers now trying to disinvent this too, but it still makes all bankers feel the urge to change at the same time and in the same direction.

One morning the sheep all wake up with the notion that the grass in the next field is nectar, so they rush for the gap in the fence and get jammed or trampled or maybe fall over a cliff, and by time they have all chewed the grass and made their contributions to the field, it is not so green as it was and may not have been all that great in the first place.

Just look what happens when we all decide to rush into investment banking, boy, are those guys a nightmare to manage, noisy overpaid accident-prone prima donnas with all the loyalty of a white rat, the happiest day of my banking career is the day I put Hillboot Intergalactic thru the shredder, Mom, at this I pick up a faint sound on my right and I realize it is Andrew, whistling.

Do we learn from this, so I ask, we do not, each of us feels the urge to do business in new countries and new products and new languages without knowing too much about any of them, Mom, at this point the faint sound comes from John, who I figure is hissing.

There is a flaw in this, I explain, it is like the strategic error made by the generals in World War One, what they need is a breakthru and for this they count on the cavalry, once they overcome certain teething troubles it is sure to be unstoppable, all they need now is a bulletproof horse. Just so with universal banks, they are unstoppable as soon as their strategists can evolve a universal customer.

It is hard enough to teach a guy or a bank to lend money and not lose it, so if you try to teach them more you risk overloading the system, and when you have them selling and cross selling everything to everyone you multiply your risks, and by the time you find out what goes wrong the next circuit blows somewhere else, and your global human resources empire asks for more resources.

Long ago, when banking is so simple and so primitive that the Medicis or old man Morgan can do it, they can hire a clerk and choose where he sits and decide what to pay him and if he does not work out they can hire someone else, all without the evil empire breathing down their necks and telling him to hand over.

These guys are a fungus that thrives on complexity, in a universal bank they are the fastest growing division of all, except maybe compliance, and contribute just as much, and my last word today (so I say) must be this, whatever change may be coming to banking's environment, it is nothing that the human resources industry cannot contrive to make worse.

This lets me sit down with a general cheer, except from John, who is busy looking pensive, and it is Andrew's cue to thank us for stimulating contributions but he must now call a halt, so as not to be late for the Vienna Boys' Choir, everybody is in the bus at a quarter past six, please, says Andrew.

For me, Mom, this is a cue to unwind and to start puzzling about old Mr Schicklgruber, do these guys in Vienna know something I do not yet hear, in head office they say he is full of beans these days, and even sprightly, please plug into the scuttlebutt at your canasta bee, is he riding again, much love from