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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