Saturday, November 26, 2011

Return with me Now...

Katie Benner's account of the inglorious misfire of  Robert Kelly (i.e., when he tried and failed to become CEO of Bank of America) is interesting enough although I think it is perhaps another instance of lede-blowing.  What fascinates me most is the stuff about his former home at Bank of New York Mellon.

I mean: lamentably we've all come to understand is that a large part of our problem is that a bank ain't a bank any more.  Bankers used to be your friend: guys who helped you build businesses, and put you into deals.  These days a bank is--well, remember my friend Ignoto, a money placer for a big pension fund who says he won't put any money into a deal managed by a major bank because he figures one way or another, the bank will be his enemy.

Not so, it appears, at Bank of New York Mellon.  As Benner summarizes:

[I]t's a highly conservative, old-line institution that specializes in mundane, grind-it-out businesses and prizes tradition, self-effacement, and loyalty. It is a major player in asset management. But its signature franchise, where it ranks No. 1 globally, is asset servicing -- the business of performing record keeping, securities lending, and back-office tasks for investment funds and financial institutions. 
More: on the bank's board, per Benner,  "for the most part, the directors were CEOs or retired CEOs of medium-sized to fairly big companies, often from the Midwest, and they shared a 'you work for us' attitude toward management."  A former board member is quoted as saying that "It didn't have high-profile people, but it was a smart, capable group."

This is almost comical, not so?  Comical in the sense that a go-go zillionaire trader, confronted with such a picture, could barely restrain himself from giggling?   News, folks: there is an old-fashioned bank, and it is right here in New York, and actually on Wall Street.  How could we not have noticed?

How, indeed.  But there is at least one gaping hole in my story.  That is: if they are such a bunch of (in the best sense) old fogeys, how did the board members snooker themselves into buying Kelly in the first place?  It's hard to say.  He may be a talented banker (and for a story about career mismanagement, Benner's is a  remarkably softball piece).  But a careful reader might well speculate that, aside from a bit of computer programming, Kelly's primary skill was and is self-promotion.  Apparently he loves to give speeches, and to draw--literally--caricatures.

But then, maybe we are both wrong.  Maybe the real story is the one that didn't happen.  Think of it: Bank of America?  Tanking stock price.  Debit card fees.  Toxic mortgages.  Power outage--you never ever have power outage at a bank.  Is there any corporate executive in America with more snakes on his breakfast plate than Brian Moynihan,  the man who did get the job that Kelly lusted after?  Perhaps the unpublished first draft is the one headed 'the luckiest man alive."  

1 comment:

Ken Houghton said...

"News, folks: there is an old-fashioned bank, and it is right here in New York, and actually on Wall Street. How could we not have noticed?"

I call bullshit. You mean the Bank of New York that was money-laundering for the Russian mob until they got caught ca. 1998? The lead contender for most corrupt "asset servicing" shop on the Street in the 1990s--and that's a difficult battle to win.

Indeed, the whole article is fluffing "Midwestern values"--down to admitting that WalkAllOverYa management was incompetent in taking over firms where it didn't have a monopoly agreement in place by pretending it was a "Northeast" problem--while eliding Kelly's work at making certain his firms never had to act like a Good Midwestern Bank again. (In fairness, the piece also trashes Southern culture--Bob wasn't like that; he "was honest and direct"--leaving anyone who spent any time in the Midwest wondering how incompetent the rest of the world thinks we are.)

Would he have been an improvement at a firm that has been run by Hugh McColl, Ken Lewis, and Brian Moynihan? Maybe, but so would my wife's pet Yorkie-Poo. But the amount of times the author tries to pretend that he found himself in "a clash of cultures"—i.e., didn't do his Due Diligence before taking the job; we're not talking a man who is desperate for money or employment—leaves me thinking that BofA at least didn't make a mistake, no matter how hard they tried.