Nothing could prevent the inevitable any longer. This was it. But Fergal refused to be beaten and giving up on the belt, he pulled at the material of his trousers and praise be, they yielded and dropped around his ankles, bringing his underpants with them. Before he could even place his trembling buttock cheeks on the moulded plastic of the toilet seat, the contents of his bowels erupted into the bowl. He had made it. To the victor, the spoils. Looking up through the open door of the cubicle – privacy had been the last thing on his mind when he had entered it – there was Daniel van der Weithuisen making for the door. Was he eager to spare Fergal from more embarrassment? Or was he appalled at the behaviour of this graduate trainee? Should Fergal try to make amends? Apologise perhaps? Ask him if this could just remain between the two of them? But by the time Fergal had decided that it would be better to say nothing, particularly as he would have had to shout to make himself heard above the noise coming from the other end of his alimentary canal, Daniel had already left the room.
Fergal left the gents with his head held high, a smile on his face as he made his way back through the reception area, as though enjoying some private joke. When he arrived back at the dining room, he felt much better about things. It could have been a whole lot worse after all. He could have done without his new boss seeing him dealing with a particularly ferocious bowel movement of course but public shame, for the most part, had been averted. It was a good omen.
2 Roll Out the Barrell
UK base rates: 5.75%
Al realised he had drunk the thick end of a bottle of wine. Not a huge amount relative to his student days but he was not used to drinking at lunchtime; particularly not in such an environment as this when he couldn’t help but feel that he was being judged and appraised, not just by the powers-that-be, but also by his peers. The food weighing heavily on his stomach and the warm air and the alcohol conspired to make him soporific. Looking around at the other graduate trainees he could tell that he wasn’t the only one who was feeling the effects of the wine. Rhys’s eyes were bloodshot and his voice had increased in volume the more he drank, his confidence bringing forth an erudition that was hidden when sober. Imogen looked more relaxed than she had all day. Fergal had started the lunch looking pale butafter his trip to the toilet had become increasingly flushed, his pink cheeks clashing with his ginger hair. Only Miles looked unruffled, as focused and together as he had been when Al had first seen him in the lift that morning. His eyes retained their analytical detachment as though X-raying everything that fell into their orbit. All Al really wanted to do at that moment in time was to go for a lie down, preferably as close to Imogen as possible. His reverie, however, was interrupted by JJ Pietersen, an urbane Zimbabwean in his mid-forties and Trenchart Colville’s Head of Treasury and Capital Markets, as he tapped a coffee spoon against his glass as though calling a wedding party to order in readiness for the speeches. 'Well, it’s been great to meet all of you and get to know you a little better over lunch. I am proud of Trenchart Colville’s abilities to choose graduates of the highest calibre. A company like this is only ever as good as the quality of the people that it employs, trains, retains and develops.' As JJ said this, he looked across at Laughing Bollocks whose job as Head of HR it was to oversee all this grooming, and nodded his head with a gracious smile. Marchant looked about as happy as a randy dog with an abundance of genitals. 'I believe you are going to be meeting with the HR people later on to go through some general housekeeping and admin. Not the most exciting thing in the world but it’ll be good to get it out of the way before the course work starts in earnest tomorrow. In the meantime, Rob here,' – he clapped a hand on Rob Douglas’s shoulder – 'is going to give you a tour of the trading floor so you can get a sense of the place. So it just remains for me to say congratulations on making such a good choice at the start of your careers.' He looked at Miles as he said, 'I know you will all be a great success.' Was it just coincidence or was it by design? Al decided on the latter. There was no doubting that Miles had something. He shone.
As the bank’s top brass filed out of the room, Rob stayed behind with the trainees and said, 'So, are we all set for the Brownies outing then? Anyone need the loo?' Fergal shut his eyes and gave his head an emphatic shake. 'Right, come on then.' Al had seen the dealing room from a distance; at his final interview at Trenchart Colville over the summer he had gone to see Basil, the treasurer, whose office was on the far side of the trading floor. The impression he had had was of a morass of lights, desks, wires and computer screens accompanied at all times by a strange noise that reminded him of his own Union bar. You could make out only the occasional word or phrase but the energy, the pulse of the conversation was constant. Unlike his union bar, however, this environment was alien; he had only ever been an outsider looking in, his face pressed against the shop window. Now, he was going inside the shop.
As they all squeezed into one lift, Al noticed the way that Imogen chatted to Rob. She seemed instantly at ease with him, laughing at a whispered comment that he made. Al couldn’t help but feel a pang of jealousy.
The lift opened on the second floor and they all filed out and stood around waiting for Rob who led them towards a large glass door, produced a pass from his pocket and tapped it against the white panel on the wall. The glass opened with an effortless swoosh and Rob said, 'You’ll get your passes this afternoon,' as he ushered them inside.
They filed into a corridor; on one side was a recessed area with tea, coffee and soft drinks machines as well as shelves lined with an array of chocolate bars and packets of crisps. There was big water cooler. Further along the corridor was a kitchen area and beyond that were the men’s and the ladies’, flanked by two tall palm trees. A big man, deep in thought, emerged from the men’s and hurried towards them. The graduates moved out of his way and the man looked at them as though affronted by their presence in his very own corridor. When he saw Rob, he became agitated and said, 'Rob, are you still a payer for four year Marks? I’m trying to leg some asset swap I’ve got round my nuts. Where d’you think you’d pay?'
Rob spoke to him as though humouring a drunk uncle at a family funeral: 'Bob, I told you earlier, I don’t think he’s going to have the interest to do more. He paid the seven year yesterday. It’ll be a long shot but I’ll have a look when I get back to my desk in five ’kay?'
Bob’s pupils were so dilated and his face so twitchy and nervous it looked as though he was struggling with an urge to hit Rob. His body jolted as though he’d been struck by an electric cattle prod and then he continued on his way down the corridor, maintaining his urgent, reckless gait, muttering to himself and nearly knocking over the potted palm at the end of the corridor as he cornered and disappeared onto the trading floor.
'Bob,' said Rob by way of explanation. 'He trades the long dated Deutschmark swap book. He’s a bit of a face.'
'Christ, if that’s a good one,' Fergal whispered to Al, 'what’s a bad one like?'
The group of trainees followed Rob towards the trading floor, a large room about a hundred and fifty feet in length and ninety feet wide. People sat at clusters of desks; most of them were on the phone, all of them contributing to the buzz and chatter. Sitting nearest to them was a woman in her late twenties, talking animatedly on the phone. She had kicked off her shoes and an expensive looking scarf was tossed across the back of her chair. She stared at the screens in front of her as she held the phone to her ear.
'I’ve got this four year BMW piece actually. It’s single A in Marks and it swaps to pay Libor plus eighty. I’ve got ten million Marks to go if you have any cares …'
Fergal turned to Miles, frowning. 'What the hell is she talking about?'
'I think she’s talking about the same thing that Bob there was talking about,' said Miles. 'She’s selling asset swaps.'
'What’s an asset swap?' Fergal’s whisper came out louder than he had intended and Rob overheard his question.
'An asset swap is a fixed rate bond issued by a country, bank or a c
orporate which is converted into a floating rate asset by bolting an interest rate swap on the side.' Fergal’s frown remained as Rob continued: 'Investors like a mixture of fixed rate and floating rate depending on their underlying views of interest rate markets, or in terms of how they fund their own balance sheets.' Rob smiled at Fergal’s continuing expression of confusion. 'Don’t worry, pal, all will be revealed.' He looked around at the wider group. 'So, let me explain how the trading floor works.' Rob pointed to some glass fronted rooms around the perimeter of the room. 'Over there, are offices for the bosses. That’s JJ’s office just there and next to it is the main conference room. Miles was right,' he gestured to the desks nearest to them. 'These guys source and sell asset swaps. They are our sales force to investors who wish to buy assets in all sorts of guises. We have a group that focuses on the UK, one on Europe, and another one that talks to emerging market countries. We are one of the few banks to focus on that and we have a very strong and growing franchise.'
Rob gestured for the trainees to follow him and led them between two rows of desks. 'This is the treasury group. Basically, they fund the bank. The guys on this side are the traders, managing the bank’s cash and trading the position to ensure we are flat at the end of the day, having neither too much cash so that we’re paying interest on money we don’t need or too little so that we panic trying to find someone to lend to us. As we have to remain as flat as possible at the end of the day, we talk to the major central banks on a constant basis so they know what our situation is and whether we might need to either borrow some funds or possibly lend some out.'
Al realised that the amount of voices did not correspond to the amount of people in the room; many voices were coming out of banks of speakers on phone boards in front of each of the traders. He listened to the voices nearest to him.
'I pay six per cent for overnight Sterling up to fifty quid for a Dutchman, Admirals.'
'Six per cent bid a bullseye.'
'Come on, who’s got some more to go?'
'Are you all fuckin’ square already?'
'A week is five point seven five at six and a quarter pay better for a Spaniard if any interest.'
One trader, all slicked back hair, pinstripes and urgency, jumped to his feet and shouted in broad cockney to an attractive woman in her mid-twenties on an adjoining desk: 'Steph, any Stewart those tossers at Paulisters are going to tell us if they are going to roll this thirty quid depo out of today? I’m forty short overnight, half of Europe is too and it’s all gone bid. The old lady’s on the fucking dog trying to find out how much I need from the window at three. If you don’t tell me in the next sixty seconds, I’m not rolling it. This arsehole’s done this far too often to me recently.'
'Keep your fucking hair on, Tel,' Steph shouted back in an Essex accent that made her inquisitor sound posh by comparison. 'I’m calling him now.'
She reached forward and picked up the phone hand set which didn’t appear to be connected to the phone board but was at the end of what seemed to be a never-ending black cord emanating from somewhere under the desk. She dialled a number and as the call was connected, her accent changed: 'Hello darling, it’s me. How you doing?' As she listened to the response, she giggled. 'Well, it’s like this, if you roll the thirty quid, I’ll not only tell you now, I’ll show you the next time I see you.' More giggling. 'One month out of today. Sure, hang on a moment.'
Steph clicked on the mute button on the phone handset and looked up at Tel, her former accent returning in all its glory: 'C’mon big boy, where you pay one month out of today in the thirty quid?'
This enquiry prompted some furious head shaking from Tel before he said: 'I’ll pay the twat five and three quarters and that isn’t a half bad bid.'
Steph clicked the mute button off on the phone and assumed her telephone voice once again: 'Darling, well in answer to your first question, they’re black with pink bows.' More giggling. 'And in answer to your second question, I’ll pay you five and a half per cent for your depo.' She listened, smiled, rolled her eyes at Tel and said, 'Love you too, see you,' and put down the handset. As she stood up and walked around the desk, Al could see that despite her young age, twenty-five at the most, her clothes, attitude and ferocious sexuality hinted at a woman at least ten years older. She stood opposite Tel and fixing him with an air that was pure confrontation, said, 'Right you, shut your yap. You know he always rolls it in the end and cos it’s late, I have an extra quarter off the prick which goes into your P and L. Every month we have this.'
'All right, cheers mate,' said Tel and sat back down at his desk leaving Steph to turn and notice the graduate trainees who were watching her with a mixture of fear and fascination. She appraised the group. She curled a disdainful eyebrow at Imogen and looked straight into Miles’s eyes.
'Right, I’m off outside for a fag,' she announced. 'Anyone coming?' As she walked past, she maintained eye contact with Miles and allowed herself a half smile. Miles, however, remained expressionless. Rob led them away from the treasury desk and deeper into the room. The noise levels increased and it became hotter. The high banks of screens all around blocked out the light. Al didn’t suffer from claustrophobia but he imagined that someone who did would struggle in here.
'Right,' said Rob. 'This is the G7 bond and interest rate derivative trading area. This is where we trade government bonds in the major currencies with the main focus on Sterling and US Dollars. We also trade Deutschmarks, French Francs, Japanese Yen, and Italian Lira. We do a little bit in Canadian Dollars and some of the Antipodeans.' Rob noticed a frown at mention of the latter. 'Aussie and Kiwi, Fergal. We also trade a variety of interest rate derivative products too. This enables our clients to either protect themselves against a move in interest rates through hedging or allow them to speculate on rate moves.' He gestured to the team of people sitting huddled in front of their screens and, louder than before, said, 'These guys here manage risk for the bank.' A couple of the traders looked around at him but he was a momentary distraction before they returned to their screens and ongoing phone conversations.
Al noticed Bob, the trader they had encountered in the corridor earlier. Seated at a desk amidst a giant nest of cables and computer screens, he was seemingly conducting two conversations concurrently, one with his phone and one with the man sitting next to him. The squall of voices from the speakers on the desks was almost deafening and as they moved forward after Rob once again, all of them eager to keep close to the guide as though being led through dangerous territory, Al felt as though he was being watched. The sensation was accentuated when he heard a bark of raucous laughter nearby and turned to see two men in their late twenties, both watching the graduates and enjoying some shared observation. Another trader sitting nearby looked across enquiringly, eager to know what was so funny.
'It’s Beaker from the Muppets.'
It was loud enough for everyone in the immediate vicinity to hear and eyes flicked away from screens to take in the graduate trainees and Fergal in particular, tall, dazed, red haired. Al felt bad for Fergal and doubly so as laughter was added to the hubbub of voices.
'Here is sales,' said Rob. 'This is my domain. I’m responsible for our sales efforts in rates products to investors. We talk to lots of clients and through the power of our wit, personality, corporate credit card and the occasional half decent trade idea, we get our clients to trade with us as opposed to another bank. Here’s my desk.'
Little desk surface was visible beneath the sheets of paper, pens and plastic cups containing varying amounts of water and coffee. A mug commemorating the Scottish 1990 Grand Slam was the only empty receptacle, clearly more of a trophy than a container, David Sole on the front of it, striding out onto the Murrayfield turf for his famous victory.
'Oi Rob! ROB!'
Rob and the team all turned as one to see the trader, Bob, red faced and agitated shouting across the desks.
'Are you going to be arsed to check if he does have paying interest, or are you going to play tour g
uide all afternoon?'
Rob met Bob’s stare and held it for a moment before turning coolly to the graduates and saying, 'Bear with me a second, guys.' He picked up the receiver as though he had all the time in the world and pressed one of the red buttons on the flashing phone board.
'Hey Mac, it’s Rob at TC. How’s tricks mate?' Rob leaned forward to look at the dense matrix of numbers on one of the screens on his desk.
'Mac, I know you had paying interest in seven year Marks; I wondered if you had any further cares? I’m axed to receive four year.' Rob looked up and catching Imogen’s eye, winked at her and she smiled back. For Al, this secret communication between Rob and Imogen was every bit as confusing and indecipherable as this strange new language he was hearing spoken for the first time. 'Oh, OK mate,' continued Rob. 'Interesting. Let me check. Two secs.' Rob pressed the mute button and turning to Bob, called out, 'He can pay for straight five year but needs annual threes as opposed to semi semi.' Bob rolled his eyes petulantly and Al glanced back at Rob to see that his expression had hardened, his clenched jaw hinting at anger.
'Bob, what’s the problem? I think I’ve got a payer here. Am I missing something?'
Shadow Banking Page 3
