Morning Coffee: The senior bankers who voted socialist. Letting go of an elite career
Britain's general election threw up a multitude of surprises, but none more so than 16,333 people in the London borough of Kensington and Chelsea who voted for Jeremy Corbyn's Labour party.
As the Financial Times points out, Kensington is where the senior European bankers live. Andrea Orcel, chief executive of UBS's investment bank, is among its denizens. BNP Paribas employs 7,500 people in London, and above VP level, most of them live in the vicinity of South Kensington station. - 25% of inhabitants of the South Kensington neighbourhood in particular work in finance. The average cost of a terraced house across Kensington and Chelsea is £4.3m according to property website Rightmove. It was only created in 1997, but the constituency has always been Conservative.
As a result, Kensington's swing to Jeremy Corbyn was met with disbelief. The votes were counted again. And again. And again. The result was the same. “It’s bizarre!”", one Kensington resident told the FT. "“He’s a communist — and the other chap’s a Marxist,” he added speaking of the avowedly socialist Jeremy Corbyn and his proposed Chancellor of the Exchequer, John McDonnell.
Some of Corbyn's success was down to the fact that not everyone in Kensington and Chelsea is rich. As the borough's own website points out, half the children living there go to private schools, but half of the remainder who are educated at state schools receive free school meals.
Anecdotally, however, the FT suggests that Labour's success in Kensington and Chelsea was also thanks to the resident senior bankers who voted for Jeremy Corbyn as the lesser of two evils. “Around here, they’re bankers and they know about money. They obviously didn’t think hard Brexit was a good idea,” one resident said.
In terms of Brexit, they may well have been right. Although both Corbyn and McDonnell confirmed on Sunday that they intend to support Britain's vote to leave the European Union, the two men also indicated their intention to negotiate continued tariff-free access to the single market. This implies support for joining the European Economic Area (EEA), which would permit a continuation of the passporting rights that allow banks based in London to trade with Europe. If an EEA arrangement can be reached, banks won't need to shift staff to Frankfurt after all.
Even so, senior bankers are playing a risky game. McDonnell has said he'd like to "teach banks a thing or two" and accused bankers of being "filthy rich" and "obscene." Corbyn launched his campaign with a threat to come after "greedy bankers" and "asset strippers. And Momentum, the grassroots organization which supports the newly revitalized Labour party, has posted a video to Facebook depicting a callously materialistic fictional banker juxtaposed with a struggling nurse.
Separately, Mihir A. Desai, the Mizuho Professor of Finance at Harvard Business School, has written an article for the Harvard Crimson on the downside of always looking out for exit options and always pursuing an elite career that keeps as many alternatives as possible open. People who've jumped through hoops and gone from Harvard to Goldman Sachs to Blackstone have simply, "acquired safety net upon safety net," says Desai. "These safety nets don’t end up enabling big risk-taking—individuals just become habitual acquirers of safety nets. The comfort of a high-paying job at a prestigious firm surrounded by smart people is simply too much to give up. When that happens, the dreams that those options were meant to enable slowly recede into the background."
George Osborne says the likely solution is transitional membership of the European Economic Area for “a very long period of time” while the UK figures out what it wants. (Politico)
Jamie Dimon: executioner. (Financial Times)
Lloyd Blankfein trolls Trump on Twitter, again. (Cnet)
Lloyd Blankfein had 75 tumors. After chemotherapy he walked around the office carrying a thermometer, because taking his temperature repeatedly was the best way to figure out quickly if he’d got an infection. (Fortune)
Senior SocGen banker sues for his bonus. (Bloomberg)
Brooklyn teacher sets children homework assignment containing the phrase:“Banks are often run by ————— people who look for ways to hurt the most financially vulnerable people in the country.” The only words that fit were “nefarious” or “reprehensible.” (NYPost)
I got overweight in banking and found fitness. (Independent)
The funeral for Ignacio Echeverría Miralles de Imperial, the HSBC analyst killed in the London Bridge terrorist attacks, has taken place in Spain. (Daily Mail)
Whatever happens with Brexit, there are now four flights daily between Frankfurt and Dublin. (Irish Times)