The Terrible Privacy Of Maxwell Sim

‘Come on, Clive,’ said Jocasta, bridling at his last comment. ‘That’s well below the belt. You shouldn’t kick a man when he’s down, you know.’

‘Down?’

‘Richard lost his job a couple of weeks ago,’ said Poppy. ‘Didn’t anybody tell you?’

‘Oh,’ said Clive. ‘No, I didn’t know that. I’m sorry.’

‘Unceremoniously booted out of the office,’ said Richard. ‘Cardboard box full of belongings and all that. No surprise, really. It’s been coming for weeks. I was one of the last to go in my department, in fact.’

‘Which department was that?’ Charlotte asked.

‘Research.’

‘Really? How odd to think that banks need a research department.’

‘Not at all. This particular bank has one of the largest of its kind.’

‘And what sort of people work there?’ Clive asked. ‘Mainly economics graduates, I suppose?’

‘No, not economics usually. Quite a number of pure mathematicians. Some of them had a background in physics, usually at the more theoretical end. There were quite a few engineers, like me. A PhD was the minimum requirement.’

I was struggling to make a contribution to this discussion, and trying to think how a department of physicists and engineers could ever be of much use to a bank.

‘So they were getting you to do … what, exactly? I suppose you were designing new ATM machines, and that sort of thing.’

Jocasta laughed wildly when she heard this. Richard just said, ‘Hardly,’ and gave me one of the most condescending smiles I had ever seen. I felt suitably crushed, but Clive rather gallantly tried to back me up.

‘Well what were you doing, then? We’re not all banking specialists, you know.’

Richard took a sip of wine, and seemed to deliberate for a moment as to whether it was worth his while answering this question. Eventually he said: ‘We were being paid to devise new financial instruments. Extremely complex and elaborate financial instruments. Have you heard of Crispin Lambert?’

‘Of course,’ said Clive. (I hadn’t.) ‘Sir Crispin, I believe he’s become, since retiring. I was reading an article just the other day where his opinion was quoted.’

‘Oh, what was he saying?’

‘Well, as far as I can remember he was saying that the good times were obviously over but it wasn’t really anybody’s fault – least of all his fault or the fault of people like him – and everybody was just going to have to get used to tightening their belts and forgetting about this year’s plasma TV or holiday in Ibiza. I believe he was speaking from the drawing room of one of his many country properties at the time.’

‘Make fun of him if you like,’ said Richard, ‘but anybody who knows anything about the history of investment banking in this country knows that Crispin was a genius.’

‘I don’t doubt it,’ said Clive, ‘but isn’t it geniuses like him who’ve got us into the current mess?’

‘What’s your connection with him, Richard?’ Charlotte asked.

‘Our bank bought up his jobbing firm back in the 1980s,’ Richard explained, ‘and from then on you can see his influence on more or less everything we did. Of course, he’d been gone some time before I arrived, but he was still a legendary figure. He basically set up the research department. Built it up from scratch.’

‘And these financial instruments that you were devising,’ said Clive. ‘They form the basis of most of our mortgages and investments, is that right?’

‘Putting it crudely, yes.’

‘So would we mere mortals understand anything about them if you were to explain them to us?’

‘Probably not.’

‘Well, give it a try anyway.’

‘There’s no point. It’s a very specialized area. I mean, would you be any the wiser if I told you that a Logic Note is a hybrid note paying a coupon rate that’s the lower of the geared annual inflation rates and the geared spread between two CMS rates?’ There was a stupefied silence around the table. ‘Or that an MtM Capped Dual Power Discount Swap combines an inverse floater fixed rate range accrual swap with a ratchet feature?’ Richard allowed himself a terse, triumphant smile. ‘There you are, you see. These things are best left to the people who understand them.’

‘And does that include the people whose job it was to sell these products?’

‘The sales team? Well, they were supposed to understand them, obviously, but I suspect they rarely did. But still, that was never really our problem.’

‘Maybe it wasn’t your problem,’ I said, ‘but surely anybody could see it was going to be a recipe for disaster. A salesman can’t possibly sell something that he doesn’t understand. And not just understand, but believe in.’

There was a slightly shocked pause after I’d said this; in order to break it – and perhaps to justify my intervention – Poppy explained: ‘Max has worked in sales quite extensively in the past.’

‘In the financial sector?’ asked Jocasta.

‘That’s odd,’ said Richard. ‘I thought I heard you telling Clive that you were involved in toothbrushes.’

‘No, not the financial sector,’ I admitted – wishing, at that moment, that I was far, far away from that dinner table. ‘I used to sell … leisure products, for children. And now, yes, I am … moving into toothbrushes. That’s true.’ From the look on her face I thought that Jocasta was going to burst out laughing again. Richard said nothing, although the disdain around the corners of his mouth was clear. Clear enough, at any rate, for me to add: ‘I’m really