The new tribes of polyglot finance

Indeed, a very pertinent article! The second last paragraph is what a few of us Indian bankers are trying to change. Ofcourse, this will come along with the growth of our own companies and economy and as we gain a leverage and bargaining power in the world markets.
- Parshu

By Gillian Tett

Published: December 8 2006 19:48 | Last updated: December 8 2006 19:48

When derivatives traders collect their bonuses next month, many of the “hurrahs” will be uttered in French. For though Wall Street is popularly viewed as the cradle of high finance, a curious feature of today’s financial world is that derivatives whiz-kids often hail not from the US, but France.

Some of these are found at French banks, such as BNP Paribas or Calyon; others at non-French groups, such as Barclays or JPMorgan. Either way, this Gallic bent highlights a bigger truth that politically correct banks hate to admit: namely that national patterns still exist in today’s financial jungle.

While places such as the City of London are now admirably polyglot, the distribution of these “immigrants” is uneven. “The City is extremely diverse but there are pockets of [national] concentration, particularly in sales,” says Avinash Persaud, a seasoned City observer.

Take the French. They have become prominent in complex finance, it is whispered, because numeracy is highly respected within French culture. “France has a very good educational system for producing derivatives traders,” notes Shaun Wainstein, London head of equity derivatives at BNP Paribas.

A love of abstract reasoning also helps with research skills: officials at Fitch credit rating agency, for example, have noticed a high proportion of French analysts in their London ranks. Russians are also over-represented in complex finance, perhaps reflecting a cultural emphasis on numeracy. Greeks punch above their weight in derivatives, too. India is another fertile source of whiz-kids. Indeed, some US banks now hire more graduates from the subcontinent than from Harvard.

Germans, however, are notably under-represented in complex finance. For while their education system produces brilliant scientists, these rarely want to leave academia or industry. British culture, by contrast, might have less respect for numeracy – but those eggheads who do emerge often head for the City. It is also relatively rare to see an Irish derivatives trader, though the Irish are plentiful in sales roles, which require charm. Spanish, Italians, British and French also appear whenever interpersonal skills matter, such as in advisory work.

Anglo-Saxons, meanwhile, arguably appear in most categories. But the place where Americans (and, to a lesser extent, the British) are notably over-represented is the upper echelons of investment banks, which remain dominated by white, male faces, in spite of the banks’ “diversity” rhetoric.

Of course, for every stereotype, exceptions abound. Just look at Anshu Jain, the high profile (Indian) head of investment banking at Deutsche Bank. Nevertheless, even with a meritocracy – or perhaps because of it – national patterns are likely to stay, as long as educational differences abound. Vive la différence, as the French derivatives traders might say.


The writer is the FT’s capital markets editor

Copyright The Financial Times Limited 2006