Pay day

National newspapers in the English-speaking world are full of doom, gloom and economic disaster. Banks are ‘downsizing’, liquidity will remain curtailed for two or three years and inflation is eating away at people’s wages, which are barely rising, if at all.

Yet what you don’t read in the newspapers is the success story of structured commodity and trade finance (SCTF). A lack of liquidity, caused by the biggest vaporisation of wealth in history, means higher margins across the board. SCTF, with its structure, security and risk management, suddenly makes a great deal of sense.

Santander, BBVA, Mizuho, BTMU, even Lloyds-TSB – to name just a few – are all keen for a piece of the action and willing to invest accordingly to get the staff.

However, some of those banks nursing ill-judged sub-prime losses, while equally keen for a piece of the action, risk losing their best SCTF staff with their penny-pinching. “Well done,” is the message those teams are receiving, “but bonuses are going to be well down this year due to losses elsewhere in the bank. Sorry.”

If SCTF were also struggling, that attitude would be justified. But at a time when the trade-finance business is booming and some big, prudently run banks are keen to expand in SCTF, many staff will be justified in crossing the City – whether London, Singapore, Amsterdam or wherever – to work for a bank that is willing to pay for their talents.

And if those banks that are suffering as a result of the chronic lack of judgement over sub-prime lose out, they will have only themselves to blame.

David Sullivan bids farewell…

It is with much regret that we bid farewell to David Sullivan, the Trade Finance Corporation founder and chief executive who has dutifully written the Letter from Hong Kong every month in TFR for many years.

A natural writer, David’s perspective on trade in China and Asia will be sorely missed – especially his combination of humour and insight that have brightened up the pages of TFR. He will certainly be hard to replace, but we wish him the very best and hope that he will be able to make at least the occasional guest appearance in future issues.

Graeme Burton
Managing editor

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