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Trouble at t'windmill?

Il gatto e' fuori dal sacco

Alberto Francioni, ABN Amro's joint head of treasury and fixed income, was recently due to attend an executive committee meeting and then lunch at the bank's Amsterdam headquarters. He didn't arrive and colleagues, including one of the two managing board members in charge of investment banking, professed ignorance about his absence. Later that day it was hastily announced that he had left for "personal reasons".

Maybe. But what kind of personal reasons? This looks suspiciously like a re-run of the clashes that have occurred at other continental European banks wrestling with the problems of building and running a London-based investment bank.

These entities are generally given a free rein to hire and build for a start-up period. During this initial phase, head office is less interested in costs than in revenues and therefore pays less attention than it might to the tedious business of allocating capital and overheads accurately.

After the start-up, though, the bean-counters move in, load up the new division with its fair share of central costs, attack cross-subsidization, look at controls and ask which parts of the new operation are doing well and which are not.

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