Bankers return to their bad habits

FT

After spending a week in Hong Kong talking to bankers and other assorted grandees, I am beginning to question whether the financial crisis actually happened.

I am pretty sure that the collapse of Lehman Brothers, the near-failure of AIG and the dance of death performed by Citigroup, Morgan Stanley and Goldman Sachs in 2008 were not figments of my imagination.

But after listening to the regional heads of large Wall Street and European firms extolling the virtues of fast-growing economies, speaking admiringly of bulging “deal pipelines”, and spouting clichés about the “world moving east”, one does wonder about the short-term memory of some financial wizards. All the talk in the glass-clad skyscrapers overlooking Hong Kong’s magnificent harbour was of the princely pay packages commanded by star bankers moving firms. In a week in which Kenneth Feinberg, the US “pay tsar” announced a retroactive probe into the compensation of Wall Street executives during the crisis, Asia’s financial titans could not stop swapping stories on the size of the bonuses being paid to new recruits.

Some even tried to claim that the industry was showing admirable restraint by limiting “guaranteed bonuses” – an oxymoronic ruse to lure coveted bankers – to “just” one year instead of the two or three popular before the crisis.

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