UBS chief executive Sergio Ermotti bravely launched a defense of the banking sector and hit out at its critics in a candid interview from the World Economic Forum in Davos, Switzerland.
In this post, we imagine the conversation Ermotti had with his PR chieftain when he returned from the mountains.
Here is the scene: The PR Chief storms into Sergio Ermotti’s office, where he is agreeing to interviews with other media outlets for later in the day.
PR Chief: Sergio, put the phone down. You can’t do any more interviews like this one in the WSJ.
Sergio Ermotti: I am only saying what others have said privately. At least I have the colgioni to say it publicly! I can say anything I want. I am the boss!
PRC: Yes, but maybe not for long if you keep doing interviews. Look at Jamie Dimon. If anyone has a right to feel abused, it’s him. His bank is performing great, but it’s an ATM for every regulator around. Still, you don’t see him spouting off in public about being a “victim.”
SE: I bet he has strong feelings about it in private.
PRC: No doubt. But he has the good sense to shut up in public. You should, too. You’re in danger of becoming the next Bob Diamond. That didn’t end well, did it?
SE: But we have to defend ourselves! This anti-bank sentiment is bad for business, bad for the economy – and deeply unfair.
PRC: We have no credible defense. No one believes what we say.
SE: How can you say that?! You are supposed to be spinning good news for us!
PRC: Before I can spin I first have to get you off the ledge. I’m also here to tell you the truth. And the truth is, UBS has given people ample reason to be angry. Do I really need to go through the list of fines, settlements, deferred prosecution agreements, trading losses?
SE: Bah – a few bad apples.
PRC: No, it was a lot of bad apples, Sergio. And we haven’t done enough to convince people we have changed.
SE: But we are changing! We have more compliance people than ever before, more training….
PRC: That’s a start, and a much better message. It will take time to turn this around. The best thing we can do is keep our heads down, serve clients well, deliver for shareholders – and stop screwing up. And when we do screw up, admit it quickly and fire those responsible, without mercy.
SE: You are cold-blooded. Do you want to work in Human Resources? This is so frustrating! We are blamed for everything – a weak economy, the lack of jobs, the wobbly euro….
PRC: Get over it. You shouldn’t expect any love from regulators, politicians, or the other stakeholders you seem so concerned about. They’ve never been that fond of banks, even in good times, so they’re certainly not going to do us any favors now. It doesn’t bother Lloyd Blankfein. It shouldn’t bother you, either.
SE: All I am saying is that everyone makes mistakes. What’s controversial about that?
PRC: Sure, but bankers don’t pay for their mistakes – banks do. Individuals are rarely held accountable. Shareholders pay the fines.
SE: They want us to be perfect!
PRC: Few things in this world are perfect, Sergio: the sunrise, a goal by Messi, a Puccini opera, and, of course, an investment banker’s bonus – it is pure, untouched, beyond the reach of reason.
SE: You have been hanging around too many journalists.
PRC: Yes, and good thing, too. Remember, the press is a window and a mirror. It presents the world beyond these walls and it reveals us to ourselves.
SE: I’m going to hire a big public relations firm to get our story out there!
PRC: The same geniuses who encouraged you to do the WSJ interview at Davos?
SE: Everyone at Davos agreed with me and encouraged me to speak out.
PRC: I’m not surprised. Did they also point you toward a black piste ski trail and tell you to leave your helmet behind?
SE: What about writing a big check to one of those NGOs? Won’t they say nice things about us then?
PRC: You can’t buy your way back into favor, I’m afraid. People want to see real change, not paper-hanging.
SE: Like what?
PRC: Take a look at what Goldman has done. It’s all in that memo I wrote months ago. A board-level review of business practices, meaningful commitments to promoting small businesses. They’ve still got a ways to go on things like compensation and risk disclosure though. Maybe UBS can show some leadership there.
SE: Um, right. I’ll think about that…right after bonuses. So I should cancel the interviews with Rolling Stone, the FT and “Newsnight”?
PRC: Only if you want to keep your job.