After the heat of battle: the accolades, the recriminations, the telling of history by the victors. It’s six months early for our Parliamentarian of the Year shortlist, but my nominee for this year’s top award is… the honourable member (or one of them) for the constituency of Athens B, Yanis Varoufakis.
Last week, the grandstanding Greek finance minister was declared to have been ‘sidelined’ from his nation’s on-the-brink debt negotiations, following a more than usually stormy meeting with fellow European finance ministers in Riga. ‘They are unanimous in their hate for me; and I welcome their hatred,’ he tweeted, quoting Franklin Roosevelt. How we journalists sighed at the prospect of losing the only leading player in Europe who adds colour to our copy. Would he be heading back to Essex University to teach bad economics — or taking up a new career as a Bruce Willis lookalike?
No he wouldn’t, because a week later he has already made a comeback: ‘The head of the negotiating team is Mr Varoufakis, who has the full confidence of the government,’ said a spokesman, adding that talks are now cruising for a settlement that will satisfy both the EU and the IMF, beginning with a €750 million repayment next week. Well maybe, but as a good Marxist, Varoufakis knows that history is not about personalities but about class war — in this case between Europe north and south — and the interplay of great economic forces. The Greek drama is moving inexorably towards the denouement scripted by the gods when the drachma was replaced by the euro, on a false prospectus, on 1 January 2001. But at least the cast has included a brilliant jester, so let’s give him a Spectator trophy in November.
The Hounslow mystery
I refrained from instant comment on ‘the Hound of Hounslow’ — the trader Navinder Singh Sarao, who faces extradition on charges of fraudulently provoking the 600-point ‘flash crash’ of US stocks that happened on our last general election day, 6 May 2010.I hesitated because, like many others familiar with securities markets, I really don’t understand this story at all.
Sarao was not a high-frequency trader like those in Michael Lewis’s Flash Boys, using technology and proximity to gain infinitesimal time advantage. He was a bloke in a bedroom dealing remotely on the Chicago Mercantile Exchange through a broker intermediary. The ‘spoofing’ he is accused of — placing sell orders but cancelling them at the last moment, in the hope of moving prices in his favour — is not devilishly cunning but quite commonplace: exchanges watch for it all the time. He is said to have responded to a warning from the CME by telling them to ‘kiss my ass’, which would show ill-advised swagger but hardly constitutes grounds to threaten him with 380 years in jail, as the US Department of Justice has.
I have written before — in relation to fines on non-US banks — about the American propensity to confuse justice with foreign policy objectives. I wonder what message they want to send to London by making a ‘perp’ of Sarao, and whether DoJ agents have spotted Hounslow on a map.
Ask the Lord Mayor
To confirm my puzzlement, I consult an expert: the Lord Mayor of London, Alan Yarrow. He’s a veteran stockbroker, ex-Dresdner Kleinwort and Grieveson Grant, who previously explained to me the merits of ‘dark pools’, the private trading platforms (such as Turquoise, the one he ran for the London Stock Exchange) in which large share transactions take place unseen by the wider market. His view on Sarao is well in tune with mine: ‘There must be more to the story, what’s appeared so far is slightlyfantastic — unbelievable.’
But one thing this case clearly has nothing to do with is the reputation of the City of London, which is the perpetual concern of Lord Mayors. ‘How do we get the narrative to change?’ Yarrow asks me. On the issue of bankers’ bonuses, he hankers for the fairer risk-and-reward of the partnership system he knew in the 1970s, but ‘We can’t [reform City pay] on our own in a global market, and people shouldn’t pass judgment parochially’. He believes that ‘creating wealth is a good thing; you should be judged on how you use it’. Like many business leaders, he thinks not enough credit is given — or sought by Brits who ‘don’t like bragging’ — for all the good things done under the heading of corporate social responsibility. He cites City & Guilds, the training institute that was founded by City livery companies in 1876, fathered Imperial College London, and now offers accreditation for millions of vocational trainees annually in 80 countries.
A fine example, I reply — since he asked — but I’m afraid the public will always see CSR, if they see it at all, as window-dressing: what they care about is whether the City, like any business, sells honest products for reasonable rewards. In that respect, at least the Lord Mayor has one thing to look forward to after the election: the Bank of England’s ‘Fair and Effective Markets Review’, designed to ‘help restore trust’, is due next month and eagerly awaited at the Mansion House. Let’s hope it delivers.
Who’s the Duke?
Something else to look forward to is the 200th anniversary of the Battle of Waterloo on 18 June. Wellington was just 46 at the time, placing him between Ed Miliband (45) and David Cameron (48) today. Which is the Duke, which the Napoleon? We shall know by the weekend, but Tory optimists might find this description of Wellington (by Horse Artillery commander Sir Augustus Frazer) oddly familiar: ‘Cold and indifferent in the beginning of battles… when the moment of difficulty comes, intelligence flashes from the eyes… and he rises superior to all that can be imagined.’ Again, let’s hope.
Join me on the Spectator cruise. Visit new.spectator.co.uk/cruise for more details.
Subscribe to The Spectator today for a quality of argument not found in any other publication. Get more Spectator for less – just £12 for 12 issues.