Banking was always considered very conservative and "clubby". Although novels and movies suggest bankers are the ultimate capitalists, nothing is further from the truth. Outsiders are never to be trusted, or so it is the opinion projected by bankers.
Sticking to their broken model, we get news from The New York Times that Lloyds Banking Group, the British banking giant bailed out by the British government, has appointed Winfried Bischoff as its chairperson. Bischoff, perhaps not surprising to the cynics, was a key player with Citigroup and a big proponent of mega-banking and keeping investment banks intermingled with commercial banks. Readers may recall that I am not a fan of investment banks, which I claim resemble casinos at times, and would prefer that they be kept separate from any commercial banking facility.
Bischoff seems to have become a chairperson only in late 2007 but seems to have been a big player in Citigroup's European operations. Here is the word from New York Times:
The Lloyds Banking Group named Winfried F. W. Bischoff as its chairman on Monday to succeed Victor Blank, who is retiring, Bloomberg News reported.
Mr. Bischoff, a former Citigroup chairman and an adviser to the British government, will take up the post on Sept. 15, Lloyds said....
Mr. Bischoff, 68, became chairman of Citigroup in December 2007. He joined Citigroup in 2000 after its acquisition of the investment banking unit of Schroders, based in London. Mr. Bischoff had been chairman of Schroders and then became chairman of Citigroup’s European business. Mr. Daniels, who became Lloyds’s chief executive in 2003, spent 25 years at Citigroup and joined Lloyds in 2001 as head of its retail operations.
Mr. Bischoff and the chancellor of the Exchequer, Alistair Darling, co-chaired a financial services panel that produced a report in May favoring “broad-based banking” models and rejecting the separation of retail and investment banking.
Mr. Bischoff will receive an annual fee of £700,000, the bank said. He will not be eligible to participate in the bank’s bonus plan, Lloyds added.
I have no idea if Winfried Bischoff played any big role in Citigroup's dubious adventures in SIV-land or CDO-land, but I wonder if Bischoff will be spearheading Citigroup's next grand adventure, trying to grab as much investment banking market share as possible—at any cost. Maybe Citigroup can finance all the hedge funds fleeing to New York. The only uncertainty in all this is whether American taxpayers will be as kind the second time around. Tags: opinion