Off message: Jousting, IMF-style
The annual get-together in Washington is like the World Cup, Olympics and a royal wedding all rolled into one for the finance industry, writes John Anderson.
‘Around the jousting grounds were the large embroidered tents of the major nobility. Fanning out behind were the lesser lords and knights until at the very back of the encampment were the toilers, the hangers-on and the ladies for whom nightly recompense awaited. Whatever delights were found in the tournament, the business of the realm took place within those tents.’
From a 16th Century description of a royal tournament.
The only thing missing from the sketch above are the scribes. I’m not sure if there were many financial publications back in those days, but if there were you can be sure their scribes would have been sticking their noises under those tents, trying to discern the next big merger, the next big deal, the next big scandal.
Fast forward 500 years and we have our own modern version of a jousting tournament in the form of the IMF/World Bank meetings.
In what amounts to a combined World Cup, Olympics and royal wedding for the financial world, the meetings provide an interesting insight into how global finance really works. The gathering is a play in two parts. On one hand, finance ministers and their subalterns, economists, hot and cold-running academics and other earnest types sit through a mind-numbing amount of presentations. You can bet this year’s agenda will include many discussions of a post-Brexit world, the capital ratios of Italian banks, Chinese exchange rates and why austerity budgets might not be the smartest thing for countries that are on the verge of insolvency.
But if you thought for one moment that was the purpose of the meetings, you would be wrong. Long ago, the investment banks – big and small – hijacked the get-together for their own purposes. And just like the embroidered tents around the jousting grounds, they will be parked in various lush suites with a full agenda of meetings with finance ministers, all for the purpose of extending their franchises within the various countries they do business in.
But the efficiency the investment banks get from having everything under their noses also brings some challenges when it comes to those frisky scribes seeking to break a story. Among the many tales I can recall of the interaction between journalists and senior bankers at IMF meetings, one in particular sticks in my mind for the weirdness of it all.
What does make this year’s session different is that, in the past, the IMF itself has not been terribly newsworthy. However, that’s no longer the case
In the early 1990s I was working for Citibank vice-chairman Bill Rhodes, whose own agenda of ending the less-developed country debt crisis and opening up the Commonwealth of Independent States, as it was then being referred to, would have brought a dozen lesser men to a point of fatigue.
I received an interview request from a then rising star financial journalist for a leading newspaper, who is now a household name ubiquitous on UK television. Rhodes didn’t know him but agreed nonetheless to meet for a quick background conversation.
When the hack arrived at the suite, he was dressed in the latest Savile Row offering of a suit that was stitched on the outside. It was a strange sight by any measure. I remember vaguely that the conversation rambled in a strange, mystical way with the journalist asking convoluted questions and Rhodes spending most of his time looking at me as if my judgement was severely impaired.
When it was over and the ill-suited one was escorted out, Rhodes turned to me and said: “Who was that guy and where did he get that funny suit?”
Not all press encounters at the IMF meetings have that quirkiness about them. At this year’s sessions, journalists will be working hard to make sense of the ever-changing world of global finance. They will be trying their best to buttonhole bankers and politicians for some sort of newsworthy insight.
What does make this year’s session different is that, in the past, the IMF itself has not been terribly newsworthy. However, that’s no longer the case.
For starters, the IMF’s own internal watchdog has criticised the Fund for the way it allowed political considerations to affect its handling of the crises in Greece, Ireland and Portugal.
To make matters even more interesting, IMF managing director Christine Lagarde is facing a court date on corruption charges stemming from her time as France’s finance minister.
In years past, the IMF has grumbled about the press paying more attention to the investment banks parked around its periphery than the work at its meetings. This year it may feel differently.