David Buik, a veteran of the City, is retiring after almost 60 years working in Britain’s financial industry. He looks back on his working life and how things have changed since he took his first job in 1962.
David Buik, left, on the money broking desk in 1969 at Kirkland Whittaker
When I joined one the most aggressive and aspiring merchant banks, Philip Hill, Higginson, Erlangers, in September 1962, I was astonishingly lucky to land such a job, in the wake of failing to trouble the A level examination boards in any subject.
My father indulged himself in fanciful aspirations of me becoming a corporate lawyer. However, in view of my academic short comings, I was more than satisfied to have been employed as a management trainee in a bank.
Can you imagine such luck today? It is unthinkable. In those days, it was a question of who you knew, not what you knew.
The last six decades have seen seismic cultural and behavioural changes.
In the early sixties, when I started in the City, dress and haircuts were very conventional. Three piece suits were almost obligatory. A high percentage of men wore a stiff collar and a plain tie. You addressed people older than you as ‘Sir’ or ‘Mrs.’
When I started in the City, dress and haircuts were very conventional
Members of the London Discount market epitomised the old fashioned traditions of the City by wearing top hats when visiting the banks on a daily basis.
Women earned two thirds of the salary a man did for doing the same job and they had virtually no managerial appointments. Those barriers have been beaten down without trace.
The early seventies saw bell bottom trousers, wide lapels, platform shoes, long hair and sideburns and mini skirts become fashionable in places.
The City also became far more international, as a huge number of foreign banks set down their stall.
The miner’s strike of 1972, with inflation hitting 21 per cent in 1974 took its toll on living standards with the FTSE 30 reaching rock bottom at 142.7.
Cheers: David Buik enjoys a night out in 1976, as the City was becoming more international
Though interest rates were sky high early in the 1980s, it was a great decade for the City. The FTSE index increased its membership from 30 to 100 in 1984, coinciding with dramatic positive personal tax benefits.
This became very evident in the eighties. It was a decade for everyone to create personal wealth.
The eighties was a decade for everyone in the City to create personal wealth.
Fund and hedge fund operations grew systematically and with that came influence and enormous wealth. The abolition of exchange controls in 1979 and the Big Bang in 1986 had taken financial activity to another level, which saw a massive increase in M&A and IPO business.
The 90s also provided huge opportunities to everyone, with private education diminishing in importance as an entry qualification and rolled into the 2000s, with the Blair and Brown era of growth and light touch regulation.
Yet, the first decade of the 21st century ultimately provided so many challenges with the credit crunch, banking and financial crisis, from 2007 onwards, which put a few building societies to the sword, all but wiped out RBS, and saw Lloyds Banking Group – including HBoS which had been merged into it – suffer just short of mortal wounds.
David Buik is now retiring after 60 years in the City
Thousands lost their jobs, with UK investment banking beating the retreat, thus handing the baton almost permanently to the likes of Goldman Sachs, JP Morgan and Morgan Stanley. Technology became key to trading financial instruments
Since then, Brexit has been a thorn in the side of the City. As it was negotiated, Lord Hammond, as Chancellor, never seemed to have the appetite to go in and bat for the financial services. These services contribute about 11% to UK GDP.
The City has lost Euro based trading, but it has just completed the most wonderful year with 108 IPOS in 2021.
If the EU remains truculent towards the UK, it will not be the beneficiary. It will be New York and Asia that will benefit. Hopefully the mutual bad feeling will dissipate and both parties will see the good sense of working in harmony.
The coronavirus pandemic and work from home emptied the streets of the City, but as people returned to the office over summer and autumn the buzz was back. Omicron has dented that temporarily, but the City will return afresh and the pubs and wine bars will be packed after work.
How the City’s business and big names changed
In 1962, business, industry and commerce were just about to take a quantum leap forward after the ravages of World War 2.
Every day the main broadsheets had a page with an ‘offer for sale’ document providing access to an IPO application form.
‘Stagging’ was a common form of investment for many retail investors, who bought shares and inevitably sold them at a profit of about 10 per cent the day after issuance – and there was no capital gains tax until 1965.
US, Japanese and European banks started to set down their respective stalls in the City, to compete with the domestic banking fraternity and the likes of Ottoman Bank, National & Grindlays Bank, HSBC, Standard Bank and Australia New Zealand Bank competed for foreign exchange, finance of trade, bills of exchange and the raising dollar and currency deposits.
London’s packed streets in the 1960s – the decade in which David Buik started in the City
In terms of importance to the UK economy, the City slipped into overdrive in the 1970s, courtesy of the advent of the Euro Dollar market, which mushroomed during this period.
Euro dollars were time deposits denominated in US dollars at banks outside the United States, and thus were not under the jurisdiction of the Federal Reserve. Consequently, such deposits are subject to much less regulation than similar deposits within the US.
By the end of the 70’s there were just over 300 banks trading dollars, other currencies. and foreign exchange. Names to conjure with included Security Pacific National Bank, Marine Midland, First Wisconsin National Bank of Milwaukee, Crocker National Bank and Nations Bank, plus twenty-six Japanese banks to add to those who had been in the City for years, set down their stalls.
UBS, Deutsche Bank, Commerzbank, Credit Suisse, ABN Amro and copious Scandinavian banks started to become very prominent in the decade before Big Bang in 1986.
Fleet Street looking towards St Paul’s Cathedral in 1970
There is little doubt in my mind that when the Thatcher Government abolished exchange controls in 1979, that policy was more significant for business development than Big Bang.
At that time, the top rate of income tax was 83 per cent
It sent out a very strong message that the UK was open for business.
At that time, the top rate of income tax was 83 per cent. The Thatcher administration cut the rate to 60 per cent in 1984 and to 40 per cent in 1986.
The Prime Minister was insistent that people should be taxed on their spending power not their earning power.
Unsurprisingly, London became an extremely attractive place to work. Enter stage right – Goldman Sachs, Morgan Stanley, Salomon Brothers, and others, who required little encouragement to muscle in on an expanding international business pie.
Their opportunities were greatly enhanced by the presence of the best legal and financial engineering advice (accountancy) in the world, here in London.
By 1967, I had learned more about the basic rudiments of investment banking at Philip Hill, than in the rest of my career, but it was time to earn a crust.
I found living in penury frustrating and lacking in fulfilment. Consequently, I was attracted to money broking and at RP Martin, which at the time was a venerable firm, started my 35-year career. I became a broker in their sterling operation.
In the ensuing years I set up with friends and colleagues a few broking operations – Kirkland-Whitaker London Deposit Agencies, which ended up as part of Godsell, which was owned by EXCO.
I was unhappy at the way EXCO was approaching the advent of derivative trading. So moved on to MMA, which eventually became part of Prebon Yamane, now engulfed in Tullett, which was recently merged with ICAP.
A Thameslink train crosses Blackfriars Bridge in 1993 in front of a City skyline that has changed dramatically since
In 1986, the Thatcher Government changed its stance to financial markets by deregulating them, which included the abolition of fixed commission charges and of the distinction between stockjobbers and stockbrokers on the London Stock Exchange.
This followed in the wake of LIFFE opening in London in 1982. The financial futures market transformed liquidity in all financial instruments.
From the futures market came derivative trading. The development of the derivative market was synonymous with the arrival of ICAP, relentlessly driven by its founder Lord Michael Spencer, who stands head and shoulders above all his peers for his vision and foresight.
He grasped the nettle as to where financial engineering was heading before any of his peers, which included such illustrious names as Guy Butler, EXCO, MW Marshall, Tullett & Tokyo, Tradition and Eurobrokers.
I owe so much to many people. In years gone by, without good clients and friends, to whom I owe a debt of gratitude, the City would be a desert for brokers.
In summation, I was quite an inspired builder of businesses, a resourceful gambler, a good communicator, but a lousy businessman. I never knew when to ‘cut and run.’
I was quite an inspired builder of businesses, a resourceful gambler, a good communicator, but a lousy businessman
It proved to be my Achilles heel. I was sacked by Yamane Prebon, in Tokyo, for speaking out of turn, in telling the management the time of day, rather than proffering advice.
On my return from Tokyo, in terms of my career, necessity became the mother of invention. I briefly reinvented myself at City Index as their PRO before moving to Cantor Index/BGC Partners for an extended career, which coincided with the machinations of the dot.com boom and its fallout.
During this time was also the atrocity of 9/11, which consumed the lives of 658 of my colleagues, who perished in the North Tower of the World Trade Center. That was followed by the 2003 Gulf War and the banking credit crisis of 2008/9.
Through the 2000s, I was privileged to be given the opportunity of making so many friends from the world of media – visual, audio and written.
Over the years I shall always be grateful to LBC, BBC, Sky, ITV, Bloomberg, CNBC, CNN, Channel 4 &5, TalkRadio and Reuters for constantly providing me with a platform to talk about the financial issues of the day. I also am so grateful to the financial press which has indulged me with patience.
Without the support of my employers, BGC Partners, with whom I spent 15 very happy and constructive years, Panmure Gordon, Core Spreads and finally Aquis Exchange, my career would have fallen into a vortex of oblivion.
> Listen to David Buik’s Full & Frank podcast with Michael Wilson where they interview leading City and business figures
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