Imagine you asked your bank for a business loan. Your bank manager – if indeed there are still members of the genus ‘argentaria procurator’ (that’s Latin for bank manager) left – might ask for the spreadsheets. If they revealed a big fat salary for you, the ‘procurator’ might say: “My Dear Homo Sapien, it appears you expect the bank to take all the risk.” You may well have found you were out on your ear (pércipe) before you could say “ego odi bancarii” (I hate bankers).
Imagine, with the help of your bank, you were trying to arrange one of those MBIs (management-buy-in), MBOs (management-buy-out) or indeed a BIMBO (buy-in-management-buy-out). You would be expected to chip in an amount roughly equal to your annual salary. Nassim Taleb would refer to it as “skin-in-the-game”. Shakespeare’s Shylock might have called it a “pound of flesh.”
Barclays is raising money to bridge a shortfall in its capital ratio. So far we have heard not a dickey bird about how management at the bank may contribute; not a hint about whether this year’s bonuses might be in the form of shares contributing to the fundraising.
Some might respond by saying “nam hypocritae.”
© Investment & Business News 2013