London Markets p7

In its favour, London had a syndicated acceptance credit market, so its bankers understood the
concept of syndication, whereas continental bankers didn't. "If the market hadn't come to London it
wouldn't have grown so fast," Craven admits.
It moved from its early base in Switzerland because the Swiss authorities refused to exempt Eurobond
trading from stamp tax. The UK authorities were more enlightened, recalls Yassukovich. When he
came to London to set up White Weld & Co Ltd in 1969, his tax advisers discovered a 19th-century
exemption (designed to facilitate intra-British-empire trade) which levied tax on office overheads rather
than trading turnover. Walter Koller and his team "rented houses in Wimbledon and got trading", says
Yassukovich. "We started a stampede to London, although Merrill stayed in Geneva."
Swiss banking goes Anglo-Saxon
Rainer Gut, chairman of Credit Suisse, was unusual. He hadn't gone to the right Swiss school or
university or done time as a reserve officer, but he trained with Lazard in New York and married an
American. He established himself at Credit Suisse having cleaned up the 1977 funds mismanagement
scandal at its Chiasso branch - whose chief manager, Ernesto Kuhrmeier, was arrested. Then Gut
created and presided over perhaps the only successful marriage of a commercial bank with an
investment bank - first Credit Suisse White Weld, then Credit Suisse First Boston. "Gut probably
brought the Anglo-Saxon culture to Swiss banking," says Patrick Odier, a partner at Lombard Odier in
Geneva. "Gut was clearly instrumental in developing [the investment banking business]," recalls
Rudloff. "He always gave us the freedom, favoured us over the commercial bank. His strength is
instinct not strategy. But it was always of enormous benefit that we could call Gut and get him to agree
[to a commitment]."
There are those who bear him a grudge, for the way he pushed through the merger with First Boston in
1978. Gut has always allowed tension and animosity to thrive. And First Boston's charge into leveraged
lending - notably for Ohio Mattress in 1988 - cost Credit Suisse billions. But the history of the group is
like the history of the Euromarket itself, moving from the early cult of personality, to a quest for size
and volume, now restructured into an integrated risk-management machine.
Orion was another hybrid entity that somehow rode high on the spirit of the time, until its shareholders
got jealous and sold it. Orion was a consortium bank set up in 1971 by NatWest, Chase, WestLB,
Royal Bank of Canada (20% each), and Credito Italiano and Mitsubishi Trust (10% each), to spread the
risk and cost of entry into the Eurobond market. Run by the aristocratic and dilettante David Montagu
(later Lord Swaythling), it made its mark through flexibility of decision-making and the energy of its
officers. Without its own market and its own source of dollar deposits it ventured opportunistically into
syndicating Canadian and Aussie dollar deals. Among its alumni are Hans de Gier, until recently
chairman of Warburg Dillon Read; Andrew Large, former board member of Swiss Bank Corp and
chairman of the UK Securities & Investments Board; William de Gelsey, renowned Euromarket
mandate-seeker, dubbed Wandervogel [globe-trotter], now adviser to Bank Austria, and to Hungary's
prime minister.
De Gelsey scored an early victory while still at Hill Samuel, side-stepping the restrictive Swiss big-
bank bond syndicate and bringing a Sfr12 million 22-year issue for the Oesterreichische Kontrollbank
(OKB) in 1970. His syndicate included Bank von Ernst (which Hill Samuel owned), Handelsbank of
Zurich, Roche & Cie of Basle, Banque Cantonale Vaudoise, Banque Privée of Geneva and Banca del
Gottardo.
Orion flourished in the heyday of consortium banking. At that time there were more than 40, most of
them formed by a club of western banks to enter a little-known market, or by Arab shareholders to
bring in western expertise. Ebic (European Banks International Company), the most extensive, was
built up in the late 1960s and early 1970s by Amro Bank, Banca Commerciale Italiana, Creditanstalt,