In these difficult times, it was felt, an extravagant staff Christmas party would be inappropriate, and so the event planned by a leading City of London investment bank in a smart West End restaurant was canceled earlier this month. So concerned was the bank about appearing insensitive, in fact, that when it promptly rebooked the same restaurant, it did so under the name of a small-town cricket club.
Though the bank will not confirm it, for many the rumor circulating in the City, the British capital’s financial district, this week has a ring of plausibility. Institutions are facing fierce criticism for anything resembling fat-cat excess. HBOS was slammed for an internal award ceremony in Edinburgh this month described as a “Roman feast,” while RBS was accused of squandering £300,000 (US$440,000) on a “secret weekend champagne junket” for executives. Lloyds TSB has attracted criticism for a “lavish party for high-rolling foreign investors” at Gleneagles.
Little wonder they have been falling over themselves to show their restraint. Morgan Stanley, Goldman Sachs and Barclays Capital have all canceled Christmas events; RBS has imposed a strict budget of £10 for each staff member (though with 100,000, that is still £1 million in parties). Lloyds TSB has imposed an “absolute maximum” of £35 a person — “that’s regardless of seniority.”
Northern Rock will be having no large-scale funded parties.
“As you would expect, we have gone through quite a lot of changes on this score over the past year,” a spokeswoman said.
But while banks may be reluctant to subsidize their staff’s sub-mistletoe indiscretions they have not eliminated all festive cheer. In some parts of the corporate hospitality sector, business is booming as struggling institutions work to hang on to the clients they have.
“We have certainly noticed the impact of the credit crunch, but it’s certainly not all doom and gloom,” said Chris Bruton, chief executive of corporate hospitality group Cavendish. “We have more sales for events for 2009 than we did at this time last year.”
He thanks in particular next year’s Ashes but also the current rugby internationals. Two banks have booked with his firm to bring “a substantial number” to upcoming matches.
Because large parties are booked up to a year in advance, said Ruth Lawton-Owen at the events caterer Moving Venue, canceling can be a false economy.
“A lot of these banks have paid their deposits for these events, and they remain liable. So it really would be a gross waste of money to throw away what would be many thousands of pounds,” she said.
Sure enough, both RBS and HBOS were this week accused of waste by canceling events.
“We are damned if we do,” RBS said in reply, “and damned if we don’t.”
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