There is a scene in the compelling film Too Big To Fail, documenting the banking collapse of 2008, in which the US treasury secretary Hank Paulson, together with the president of the Federal Reserve, Timothy Geithner, gathers the heads of the biggest US banks, including Goldman Sachs’ Lloyd Blankfein, JP Morgan Chase CEO Jamie Dimon, and Morgan Stanley chief John Mack. The purpose is to try to persuade them to underwrite the purchase of the stricken Lehman Brothers by Bank of America.
It’s a dramatic episode. More so, when away from the table, Bank of America is then approached by a troubled Merrill Lynch, and Bank of America agrees to buy it instead. That leaves the British bank, Barclays, as the only possible saviour for Lehman, and it’s blocked by the UK regulators.
The picture reeks of power – failing clout maybe, but nevertheless the testosterone flies off the screen. Not least, because you realise that every single person involved, in camera, sitting in the chairs and also on the phone, at Bank of America, Merrill, Lehman, Barclays and the authorities, is a man.
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After the crash, the Labour politician Harriet Harman remarked of the amount of turmoil, “Somebody did say … that if it had been Lehman Sisters, rather than Lehman Brothers, then there may not have been as much.”
Continued Harman: “I do seriously think half the financial services industry is women now. Women make up half the workforce of insurance companies and banks. Why shouldn’t they have a say on boards as well?”
At last – 11 years after the near-total meltdown and hundreds of years of banking history – a female has broken through the glass ceiling of major British banks, and by extension the City, and British business. One of the “big four” British banks of RBS, Lloyds, Barclays, and HSBC has a woman at its head.
There have been other female chiefs in British banking – Ana Botin at Santander and Dame Jayne-Anne Gadhia at Virgin Money, the purchaser of Northern Rock, as well as Inga Beale at insurer Lloyd’s of London and Clara Furse at the London Stock Exchange, but Alison Rose’s appointment to run RBS is the most significant leap.
She is the first woman to head a genuinely big time, all-singing, all-dancing British bank; not just a lesser player or one that specialises in retail banking, but an organisation that, while it’s not what it was compared to the heady days pre-crash when Fred Goodwin was in charge, counts as a financial powerhouse. Rose tops 67,000 employees and oversees an asset base of £694bn and leading brands such as NatWest and Coutts. Her bank is the largest provider of banking, finance and risk management services to UK corporate and commercial customers.
The elevation of Rose, married with two children, and with 27 years of service behind her at RBS, is a landmark. I’ve wined and dined at all the large bank headquarters in my time, and not once have I been hosted by a woman. On the way to the hospitality suite, you’re usually taken down a corridor adorned with portraits of current and former bosses. Every single one of them has always been male.
Nowhere was that masculinity more evident than at RBS during Goodwin’s day. He wasn’t a muscly, heavyweight of a bloke – more fly-half than prop forward – but he oozed the male traits of aggression and competitiveness. Goodwin would positively bristle when a rival was mentioned, his flinty eyes inevitably narrowing and his lip curling. He couldn’t help himself. It was the culture in which he’d been brought up, in which he’d risen up. A macho, kill and take no prisoners, culture.
When Harman made her comment, I admit, my first reaction, like many men, was to mock her. Here we go again, I thought, the sisters making a claim that was naive and out-of-touch. The banks’ failure, I reasoned, had nothing to do with the gender of those in charge. But then I remembered the lunch I’d enjoyed at Lehman, shortly before it went under, when the men present – only men – were mocking the calamity at Northern Rock, also run by a fella.
And I recalled Goodwin, and how he’d set RBS on a course to disaster by steering it to acquire ABN-Amro, partly because, it was always said, he could not bear the thought of Barclays taking over the Dutch bank. ABN-Amro was a terrible buy, with RBS paying well over the odds. It led to RBS having to be rescued by the British government, and caused the toppling of Goodwin.
Would a woman have done the same? Would Rose, if was up to her, as it could be in the years to come, embark on something similar? I doubt it.
Recalling 2008, and the death of Lehman, and remembering that subsequent film, with all the men outstaring each other, and refusing to show any sign of warmth lest it be interpreted as weakness, it’s difficult to argue Harman’s madness. She may well have had a point.
It’s up to Rose now to show so. She takes over in a different banking climate, but make no mistake: hers is the most vital move of any by a woman in British business. Nowhere is more sexist than the top of British commerce (despite what the PRs claim), and within that, nowhere is more sexist than the City (despite what the PRs claim). It’s been too long coming, but Rose’s selection is the cause of much rejoicing.