Edinburgh Fringe 2014
Quant reaffirms the fears that the UK could be sleepwalking its way towards another financial cliff.
A man in a sharp grey suit and crisp white shirt stands and sarcastically applauds the dozen or so people sitting in the dull lecture theatre, awaiting his wise words. Thus are we, the audience, cast as the greenest of green trainees in “the world’s second biggest bank”, each of us seeking a ticket to the fixed income trading floor and the untold riches that this could yield.
In the next hour, we’re treated to a lesson in risk from a quant (quantitative analyst) who took one too many himself, earning a visit to one of Her Majesty’s corrective institutions for the morally bankrupt. And it’s a salutary lesson as well. Flipping from his present role as mentor to new banking trainees and the tale of his own rise and fall from grace as a trader, Jamie Griffiths examines the psyche of the investment banker, and particularly what drives them to take the risks that they do – with other people’s money.
Illustrating his points with thoughtfully chosen slides, Griffiths flips between lucid, easy to grasp explanations of even the most complex financial products (simple odds driven bets, to you and me) conjured up by the industry in the run-up to the 2008 crash and frighteningly complex soliloquies that try to rationalise the adrenalin fuelled behaviour exhibited by so-called ‘rogue’ traders. The contrast between Griffiths’ alternating persona of wild, Welsh trader and the cold, calculating demeanour he depicts as the mentor is stark. As is the conduct of the financial maestro charged with supervising his trading activities – he’s happy to sacrifice this junior trader’s career as the profits made elsewhere from the bets that do come off far exceed the brand reputational damage and fine imposed on his bank by a toothless regulator.
Far fetched? Far from it. This impeccably researched and dynamically communicated piece of theatre is alarmingly close to reality. Griffith’s skills as an actor, combined with his ‘regulation’ city appearance, lends his performance an air of gravitas common to the boardroom of any large bank. But no bank is likely to listen to him, simply because, five years on, many of those bailed out by taxpayers are back pursuing those same trading policies that got them into such hot water in the first place, as illustrated by the recent prosecutions of Adoboli, Picano-Nacci, Kerviel and others.
Quant is a success on several levels, particularly in the way that it exposes the shallowness of the world that investment bankers inhabit, a pale imitation of what most of us think life is about. It’s also a methodical and appropriately cynical deconstruction of an industry that still accounts for some 10% of the UK’s GDP (and similar proportions in other leading economies), putting it into the ‘too difficult to address’ box for political leaders.
‘Too big to fail, too big to bail out and too big to manage’, was Ray Pearman’s summary of the global investment banking giants in a captivating interview given earlier this week at Edinburgh University’s Business School, comments that were echoed in a subsequent session by that doyen of financial commentators, Peter Jay.
Quant simply reaffirms the fears that the UK could be sleepwalking its way towards another financial cliff. A compelling and frightening piece of theatre.