A Norton Rose Group magazine Issue 3 Re: WoRk dementia the ...

e: Work
Stephen Parish
Chairman Norton Rose LLP
the Bank of england Governor, sir mervyn king, said in
a recent BBc interview that there are many lessons to be
learned from what has happened; in your view, where does
the blame lie?
I think it is offensive just to blame the banks. They were
doing what their shareholders wanted them to do, which
was to explore ways of making money and of trying to
mitigate the risks, but in reality being unable to do so,
probably because they were not as clear about what they
were trying to do as they should have been, for example in
relation to securitisation.
securitisation is a fantastic product which will come back,
it is coming back, but it got out of control and probably too
much was being securitised – in exactly the same way that
the leveraged finance market got out of control, because
the banks were lending far too much against their normal
formula, EBITDA. Everybody should have been aware of the
fact that the original formula was the right one and that, as
they relaxed more and more, they were getting into deeper
water.
I am a great believer in the economic cycle, I’ve been
through four so far in the City, and the darkest hour is
always just before dawn. People are just saying, it’s
never going to be the same again, it’s hopeless, and then
suddenly something happens, a little bit of confidence
comes in, deals start to get done again and whoomph!
We’re off again.
Do you think that the bankers will change the way they do
deals? or are they like the proverbial leopards?
once they get into that mode of doing deals in a particular
way, and it seems to work, I strongly believe that it would
be virtually impossible to rein them back as individuals.
Yes, you can have regulatory restrictions and requirements
and all the rest of it, but ultimately it is down to the
individual banker when he’s doing a deal to get the
best terms for the deal and then to convince the credit
committee that that’s a good deal that should be done –
but they’ll always be pushing the boundaries.
i joined norton Rose in 1974, at the height of what was
then described as the secondary banks crisis, and the
word was that banking will never be the same again.
well, it was, and it has been, and it keeps being the same
again; and do I think that suddenly there is going to be a
complete sea change? – no, i don’t, because bankers are
in the main extremely intelligent people who will always be
looking to push boundaries and to try and demonstrate a
competitive edge compared with their peers, and however
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much you try and constrain them by regulation, whether
it’s light or heavy, they will always be looking to push
those boundaries. It’s not to say that they should be; but
it’s inevitable.
Does the city of London need reform or revolution?
The City of London above all should be about stability.
the City has fantastic attributes, only some of which are
to do with the skills of the people in the City. english
language, time zone, history, tradition, reputation – all
of that underpins a completely thriving environment
created by the intellectual capital which is focused on the
City, whether it’s bankers, insurance people, lawyers,
accountants or whatever, and that is something that’s
been created over centuries.
there was very much a city culture where lawyers would
retire at 55.
ten or 15 years ago that was absolutely the culture. if you
were getting to about 50 in the City, there was this feeling
that you were getting close to the end of your shelf life.
It may have been down to the fact that you probably had
the wherewithal then – being able to think, okay, well let’s
go and run a grouse farm in scotland now – because the
rewards had been so huge, certainly during the latter half
of the 1990s.
I think it has switched back over the last five years; there’s
a recognition that you don’t want to get rid of all the grey
hairs; you don’t want to lose that wisdom.
The City is a very supportive and inclusive environment.
That’s how business gets done; you like dealing with
people that you like dealing with.
You were the first Group Chairman and you used that
profile to do quite a bit on diversity. Just thinking about
the women for a minute, what does that mean for us?
I remember going to the 200th anniversary of Norton Rose
at the guildhall in 1994 with about a thousand guests
present, at which there were 20 women. i mean, that is
not right. i was in another dinner a few months ago, and
was looking at the guest list on the way home, and out of
about 430 people there were 35 or 40 women, of whom
three were ambassadors. it was just extraordinary.
Personally, I am very much against setting targets and
quotas – that implies artificiality not merit – but what I do
know is that we will be a better business if women within
norton Rose feel that they are not constrained by barriers,
whether actual or artificial.
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