Credit Suisse's Dougan should speak up

Jeffrey Goldfarb

There is no shortage of self-appointed spokesmen to defend a banking industry besieged by regulators and taxpayers. But investment banking’s most authoritative advocate is also strangely its quietest – Brady Dougan, chief executive of Credit Suisse.

Barely a day goes by without Goldman Sachs’s Lloyd Blankfein, Deutsche Bank’s Josef Ackermann or JPMorgan’s Jamie Dimon wading into the debate about bankers and banking. The jocular Blankfein is a regular on the newspaper op-ed pages. Ackermann’s position as president of the finance industry’s trade body has given him plenty of excuses to play the role of thought leader.

But the influence of this triumvirate is insufficient. The populist reduction of Goldman to vampire squid has arguably lessened Blankfein’s sway. Ackermann’s authority is somewhat restrained by Deutsche’s own niggles, including a stubborn refusal to go with the flow and raise conventional equity capital. And Dimon’s straight talk might be better received if it wasn’t so often pugnaciously delivered.

Dougan’s voice has been deafeningly silent through the crisis. It is easy to see why Credit Suisse’s US-born chief wants to keep his head down. Dougan went from shy to gun-shy in February 2008 when a $3bn accounting scandal appeared just weeks after Credit Suisse reported respectable results. The incident taught a valuable lesson. A few months later – when Ackermann and Blankfein led a chorus of premature optimism about the direction of the crisis – it was Dougan who took a darker, and correct, contrarian view.

Credit Suisse’s performance has reflected the caution of its leading man. The firm unloaded risky assets and accumulated capital more progressively than peers, and unabashedly tackled the bonus conundrum head-on with innovative pay structures leaving staff exposed to toxic assets that no other market participants would touch. It has emerged from crisis a much stronger franchise.

Dougan has popped up on rare occasions. But these have generally been wasted opportunities. About the most interesting revelation from a recent newspaper interview was that Dougan is rarely seen without a can of Coke, Buffett-style. That seems like a waste of Dougan’s authority surplus. The consequence of being so inconspicuous is that Dougan has left the responsibility of representing the industry to peers with more confidence but less credibility. It is time for Dougan to shed his quiet-man approach and speak up.

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