[A-List] City of London modernisation

["Michael Keaney" <michael.keaney@xxxxxx>]

Outlook: End of the road for 'old' City as another famous brand dies
By Jeremy Warner
The Independent, 13 November 2002

For anyone with a sense of City history, the death of the Warburgs name is
something of a defining moment. Few of the names that dominated the City
before Big Bang still exist, but if at the time you had been forced to bet
on one with the staying power to carry on, SG Warburg, once a byword for all
that was best in British merchant banking, would have been high on
everyone's list.

SG Warburg was long ago subsumed within Swiss Banking Corporation, which in
turn was then subsumed within Union Bank of Switzerland. Even so, the
Warburg name continued to live on as the second half of the group's global
investment banking brand. Now Warburgs too will follow the wealth of other
"old" City names into the dustbin of history, another victim of the brand
consultants. Research in 14 countries has discovered the name to be
worthless and therefore dispensable.

I doubt very much that Siegmund Warburg, the firm's founder and long
standing inspiration will be turning in his grave over the disappearance of
his nameplate. He was not a sentimental man and would have recognised better
than most the purging and destructive market forces that have laid waste to
so much of the old City.

All the same, there is a certain shame in the fact that not a single British
name from the old guard managed to make the leap, as the City as a whole
did, from small, parochial player to one of the globally dominant behemoths
that today rule the capital markets. SG Warburg was our best hope, and for a
while it looked as if Sir David Scholey, a worthy successor to Sir
Siegmund's mantle, might pull it off. That he failed was not all down to the
British incompetence that was said to reign supreme in the City before it
opened its doors to all comers.

It was also to do with unfair competition from the US. The British surrender
took place in two phases. In the immediate aftermath of Big Bang in 1986,
most partners simply held up their hands, sold out and retired to the
country with the labradors. It was a neat trick, for most of these firms
weren't worth a sausage and those who bought them ended up losing their
shirts. Others, like SG Warburg, declared their intention to stand and
fight, and eventually to become a bulge bracket firm themselves.

It may always have been a doomed endeavour. In the next phase of invasion,
the Americans came with their fat cheque books and so horrendously bid up
the cost of staying in business that firms without the cash cow of the US
market to fall back on found it impossible to compete. The City had been
made open to all comers, but were Warburgs and others allowed reciprocal
rights to the hugely lucrative Wall Street underwriting cartel? That
remained a closed shop and still is. Sir Siegmund would have understood why
his name is going, but his legacy was robbed, none the less.