Most FX players understand this; they accept a little bit of rough goes with a lot more smooth.

This week, word reaches me that some people at Merrill Lynch think I may have been a bit unkind in the way I reported Harry Culham’s appointment as its latest global head of FX in the October edition of the magazine. “Merrill has an almost unbelievable record in the number of global heads it has hired and fired over the last decade. However, the fact that Culham is rejoining Merrill, where until early 2002 he was head of FX trading EMEA before leaving for AIG, should ensure he is under no illusions about the risks his new job entails,” I wrote. I’ve had quite a lot of feedback and, generally, the word is that Culham is a good manager who knows his stuff. Maybe Merrill is finally going to get it right in FX, if it is accepted that so far it has got it wrong.

I also suggested last month that Merrill would be the odds-on favourite for our understatement of the year award if anyone ever said: “Merrill has to pay up for its FX staff, as newcomers know they won’t be there for the long term.”

My mum always told me not to be flippant; perhaps I should have listened to her. What I didn’t write was that I was worried I’d been left short and caught after getting paid 4.5 for £100 when asked to make a price on how many global heads Merrill has had over the last decade. Merrill won’t tell me the real price, but after having a quick sniff around, it was pretty easy to come up with a list of seven names, including Culham. They are as follows, with the most recent head first:

1. Harry Culham    *More Harry Culham coverage on the weeklyFiX
   
2. Harry Lengsfeld
3. Steve Kemp
4. Michael DeSa
5. John Wareham
6. John Key
7. Keith Jacobsen

David Gu may also have, if only temporarily, technically held the role. So it looks like I’m out at least £250.00, but possibly £350.00. For a humble hack, as I now am, this is not an inconsiderable amount of money. But I shouldn’t grumble. I showed a cheap offer and I got paid.

Anyway, a well-placed senior mucker in the market casually mentioned to me that Lehman may have had almost as many big cheeses over the same period as Merrill. Funnily enough, Lehman, along with most of the other top banks I put the same question to, was a bit reluctant to answer a straight-forward query. It’s not like I asked any of them whether it was true that their e-commerce platforms were rubbish, suffered massive latency and when they did deal, their back offices fell over under the weight of ticket processing – but more of that in future columns.

Lehman has had at least six global heads over the past decade. To be fair, the changes seem like a shuffling of the chairs within the bank, and now it has decided to bring in some fresh ideas with Richard Gladwin. This is a different approach to Merrill’s: shipping in a complete new team every couple of years or less. Here are the names:

1. Richard Gladwin
2. Kaushik Amin
3. Grant Whiteside
4. Ivan Ritossa
5. Mark DeGennaro
6. Alan Marantz

It’s an old quip that even though investment banks are paid to give advice on how to run businesses, they frequently have no idea about how to run their own. At first glance, it is hard not to think this is an accurate appraisal of Merrill’s FX operation.

To test this theory, I decided to take a look at whether or not there was any correlation between the number of global heads banks get through and their performance in the Euromoney FX poll. The banks chosen to represent stability were Citi, Deutsche and UBS. Lehman was somewhere in between and Merrill represented chop and change.

Citi has been incredibly consistent and has not been out of the top three for a decade. Of course, this may be just because of its sheer size and have little to do with the fact that it has had very little management change over that period. Some may feel it has such a great franchise, it could almost run itself, but I don’t actually buy that one. Deutsche’s performance has also been stellar, while UBS and its predecessors were erratic before the new millennium; but as everyone knows, it has been one of the trailblazers in FX ever since. All three have had management stability. When they make changes, they generally come from within.

Compare that with Merrill, whose performance in the poll over the past 10 years makes John Prescott’s syntax look consistent. It was a lowly 24^th in 1996 and then shot up to third the next year. Back to 24^th in 2002, the bank then managed to climb into the top 10 with a slightly surprising sixth place in 2005, before slipping down to 10^th this year (see table).

Deutsche, Citi and UBS: Consistent management, consistent placing in the Euromoney poll.