Barometer of Fear by Stenfors Alexis;

Author:Stenfors, Alexis;
Language: eng
Format: epub, azw3
Publisher: Zed Books
Published: 2017-07-04T16:00:00+00:00

CHAPTER 6

CONVENTIONS AND CONSPIRACIES

In 1995, I was sent to the HSBC Group Management Training College in Hertfordshire to learn the basics of foreign exchange trading. It was nice to leave dark and icy Stockholm behind for two weeks to join 15 or 20, mainly London-based, soon-to-be traders and sales people in the leafy English countryside. HSBC was very good at FX, probably in the top three in the world at the time, so my expectations of the course were high. We got to play a computer-based trading simulation game, designed to replicate a realistic situation in a dealing room. It was fun, and the teacher was both knowledgeable and engaging. I remember how we were repeatedly told to ‘galvanise our HPs’, as if our calculators (manufactured by Hewlett-Packard) were like musical instruments needing to be restrung before a concert. We had to practise, practise, practise – to master the most difficult mathematical problems that could arise in FX and money market trading. However, after a day or two I think most of us found the classes rather tiresome. The young orchestra – wanting to play, rather than simply learn the chords – became frustrated and began to miss the buzz of the London dealing room, even if at this stage of their careers they probably did little more than tea and sandwich deliveries for the desk. I just felt lucky to be there, but perhaps also a little looked down on by some of the others who, I thought, saw me as an unsophisticated relative from some distant wilderness. Frustration turned into desperation, and one night, after we had stayed up chatting and bragging, someone had the idea of breaking into the bar inside the training centre; as with everywhere else in England at the time, it had closed at 11 p.m. Two fearless traders-to-be turned the vision into reality by somehow managing to find an entry point. Perhaps the bar had been left unlocked? I cannot remember more than the fact that soon thereafter the drinks were flowing. ‘Gold’ by Spandau Ballet was playing on the sound system. Even now, whenever I hear Tony Hadley singing about being ‘indestructible’ I cannot help but wonder what happened to my classmates when they got back to London. I am not just thinking about the two mischievous ringleaders, who seemed both ruthless and smart. Any trading desk would have been delighted to have them on board, and I doubt the incident was ever reported. No, I am thinking about those who cheered them on, who tried to persuade them to stop, or who, like me, neither actively helped nor actively prevented it from happening. Those who just happened to be there.

***

In November 2014, six global banks received fines totalling $4.3 billion for manipulative trading conduct in the FX markets.1 Despite the incredibly large fines, which matched or even trumped those in relation to LIBOR, things were by no means settled. ‘This isn’t the end of the story,’ said Martin Wheatley, then head of the FCA.

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