Related articles .. Firms are now drawing up contingency plans if eurozone breaks up ... and.. Banks are looking for new ways to settle transactions in different currencies in preparation of/if the Euro Collapses ... and .. JP Morgan, will Cazenove attend the meeting? Link ~ Cazenove's Wise new head looks beyond one-man brand ... December 15, 2011
U.K. Is Pondering End of the Euro
LONDON—British regulators are meeting with banks to discuss the state of their preparedness for a potential breakup of the euro zone, according to people familiar with the matter.
The U.K.'s Financial Services Authority has been talking with chief risk officers at top British and international banks to get a better understanding of their contingency planning, the people said. The regulator has asked banks to submit reports detailing their preparations for what would happen if the monetary union unraveled or individual member countries were to revert back to their old national currencies.
The FSA is planning to host a meeting in coming weeks at which top bank executives will huddle with senior regulators to compare notes on how they can further prepare, these people said. The meeting will include executives from big British banks as well as international companies with London investment-banking arms.
"It's an opportunity for firms to share their experiences," one person said. The meeting will include a discussion about areas in which the banks need to improve their preparations, this person said.
The FSA also is engaging in one-on-one dialogues with some banks to discuss ways they can do more to prepare for a possible euro-zone breakup.
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A top FSA official, Andrew Bailey, said late last month that the FSA is encouraging banks to engage in contingency planning. "Good risk management means planning for unlikely but severe scenarios, and this means that we must not ignore the prospect of the disorderly departure of some countries from the euro zone," Mr. Bailey said at a London conference. "I offer no view on whether it will happen, but it must be within the realm of contingency planning."
The FSA has recently stepped up its efforts to gauge the fallout. Late last month, the agency sent an initial letter to banks asking for their update on contingency planning such as how the banks would handle legal agreements based on the euro currency and how they would internally process a breakup, according to a people familiar with the letters.
The FSA found that banks had mostly been considering scenarios in which just one or two countries—namely, Greece or Portugal—left the euro zone. Regulators earlier this week sent another letter pressing banks to consider plans for a breakup of the entire 17-nation currency bloc, these people said. Members of the FSA this week have also been meeting with U.K. banks' chief risk officers. U.S. banks have been having similar discussions with their regulators, these people said.
At least one major U.K. bank, however, has refused to provide additional information on the scenarios it is planning for, saying to do so would be too onerous to pull together, according to a person familiar with that bank's thinking.
The banks have been telling regulators they focused on several areas of risk in the case the euro dissolves. One is how former currencies like the drachma or the lira would be valued. In their discussions with the FSA on the matter, they have expressed their desire for an orderly euro-zone breakup, should one occur, with international bodies such as the International Monetary Fund and Organization for Economic Cooperation and Development clarifying the value of countries' currencies and the legal framework around euro-denominated deals and deposits.
They have also told regulators that their technology and support functions would need to be reviewed in order to understand whether existing systems could be adapted to trade in new currencies, and whether traders would have to be retrained, this person said.
In all, some executives have privately concluded that a full, disorderly breakup of the euro zone would be "pretty catastrophic" for them, this person said.
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Cazenove's Wise new head looks beyond one-man brand
London, Tim Wise has a complex balancing act to pull off as he steps onto the public stage as head of JPMorgan Cazenove, the new face of a venerable British broker and adviser prized for the discretion of its bankers.
Wise took over last month as chairman from David Mayhew, one of the City of London's best known and yet most intensely private bankers. A corporate finance specialist, Wise has until now kept a low profile, known only to clients, colleagues and peers.
Even as chairman, the 50-year-old cricket fan and keen cook still intends to spend much of his time behind the scenes, with a focus on advising his British corporate customers.
But Wise is also acutely aware he has to move Cazenove beyond the era of veteran Mayhew, who, after 10 years in the top job and more than 40 at the firm, was virtually synonymous with the business. Mayhew, 71, becomes vice chairman of JPMorgan's global investment bank where he will focus on advising clients.
Cazenove, the quintessential blue-blooded British bank known as the Queen's broker, evolved relatively quickly in recent years under Mayhew, most notably through its takeover by U.S. investment bank JPMorgan in 2009.
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A partnership for most of its nearly 190-year history, until it became incorporated in 2001, it had a member of the original Cazenove family working at the firm until 2004. That's when Mayhew engineered the initial joint venture with JPMorgan -- an even older firm, whose earliest predecessor was established in 1799.
"One of the great myths (about Cazenove) is that we are an ossified business with a traditional group of broking clients that have been here since the 18th century," said Wise, groomed as Mayhew's heir throughout 2011 after 12 years at the firm.
"We have a dynamic business, we are replenishing our client base all the time and a significant amount of our revenue comes from new business," he told Reuters over breakfast -- a meal Wise rarely eats to compensate for the regular lavish lunches and dinners required of bankers -- at Cazenove's London headquarters.
The offices are currently tucked away around a leafy square close to St Paul's Cathedral, although the bank is set to move into Lehman Brothers' old building in London's newer financial district in Canary Wharf.
In conversation, the understated Wise shows the kind of reserve and caution for which Cazenove is famed. He declines to give details of clients or discuss his "best deals" -- a far cry from the huge 'tombstone' newspaper adverts which characterise the way many investment banks trumpet their activity.
LIVING AND BREATHING IT
Companies flocking to the London market to list are usually a huge source of business for Cazenove, still the adviser of choice to more top UK companies than any other investment bank.
This year's rocky markets made 2011 "a graveyard," says Wise. But the combination with JPMorgan and its diverse businesses has helped Cazenove weather some of the turmoil battering rival London brokers, and the marriage many thought doomed because of a deep culture clash has instead prospered.
One of Wise's big challenges will be to preserve the character of Cazenove while it continues to win business and keep its broking clients in a rapidly-evolving investment banking world.
Few expect Wise to attempt to replicate the personality cult that developed in the City around Mayhew, a heavy smoker known for his trademark glasses, with a legendary reputation as the "go-to" banker for every company board in Britain.
It is not Wise's style, according to peers at rival banks who have dealt with him over the years.
"He's very intelligent, very client-focused. (But) he's not a brand person," said one. Tellingly, Wise does not even have a corporate photograph on file yet despite his years at the firm, which he joined from Dresdner Kleinwort Benson in 1999.
For him, moving away from the one-man brand is the right strategy.
"We have a stronger team now than at any other time in living memory, at all levels. Five or 10 years ago, too much depended on one individual, with David (Mayhew) as the most prominent, which David himself recognised," he says.
Wise will be working closely, and even share an office, with Laurence Hollingworth, Cazenove's head of UK investment banking and one of several key bankers still in place after a handful of senior departures earlier this year.
The pair have been re-introducing themselves to clients over the past months. Other pillars of the Cazenove team include Ed Byers, head of corporate broking; merger and acquisition specialist Barry Weir; and financials institutions expert Conor Hillery.
Wise is measured, but engaging and witty.
He grew up in Asia and was educated at Radley, one of Britain's most exclusive boarding schools. He studied law at Christ Church college, Oxford, before turning to banking after 18 months working at law firm Freshfields.
And as an alumni of Kleinwort Benson, another City institution snapped up by an overseas bank, Wise embodies some of the "Britishness" and traditions Cazenove is known for.
He is a sports fan beyond the cricket he played at school and now with friends in his village of South Harting in West Sussex. He is also a keen skiier since his family moved to Geneva in his teens, as well as a tennis and golf enthusiast.
Father-of-three Wise has a clear vision of how Cazenove will evolve and yet keep its spirit and traditions, and that involves bringing up employees from within instead of poaching senior bankers from elsewhere.
It's one way at least to ensure Wise's own Cazenove philosophy -- one he described as "simple in concept and quite hard in practice" -- is ingrained.
"It's about capabilities and making sure you have the right people; you've got to maintain a client approach that marks us out for integrity and impartiality," Wise says. "Unless you live and breathe it every day, it's difficult to do."
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Related articles .. Firms are now drawing up contingency plans if eurozone breaks up ... and.. Banks are looking for new ways to settle transactions in different currencies in preparation of/if the Euro Collapses ... 