FX will inevitably get caught up in the cyclical culling we’re starting to see as a result of the credit debacle.
The relationship between sales and trading desks has always been interesting. Many years ago, I arranged a friendly cricket match between Midland Bank’s traders and its FX sales staff. The match was always likely to be competitive, but I was amazed how quickly it moved from affable rivalry to outright war.
Cricket may look a soft and genteel sport to those unfamiliar with it, but a hard leather ball can do a lot of damage when it comes directly at your head at speed. After several bouncers and a few beamers were delivered, the traders won the game by several wickets and a few retired hurts. Our view was that whacking a few sales guys would not affect the business in any way – in fact, many of us took the view that braining some of them could only be a good thing by knocking some sense into them. Needless to say, the powers that were didn’t share our outlook, and we were immediately banned from similar intra-staff matches that required physical contact.
Midland introduced the system of sales credits in the late 1980s. From day one, most of us realised there was an obvious flaw in the system.