Underwriters, Traders Arriving Late to London’s Sobriety Party: Viewpoint

June 17, 2019 by Elisa Martinuzzi

For most of the traders, bankers, lawyers and accountants who populate the City of London, the era of excessive daytime boozing is long gone. Pubs and pints have been replaced by coffee shops and lattes. Dealmaking hasn’t suffered for it.

There are, though, pockets of the world’s pre-eminent finance hub where business is carried out much as it was hundreds of years ago. In commodities trading and insurance underwriting – which rely still on shouting across the trading floor, actual rubber stamps, and leather-bound ledgers – heavy drinking remains part of the old rituals.

It’s hard to feel much affection for this particular tradition. Alcohol abuse has devastating consequences; and not only on the health of those who partake. It’s been the root cause of much of the misconduct that continues to bedevil these particular markets, whose cultures of harassment and bullying have proven difficult to uproot.

Change may finally be afoot, though. The revelations of the #MeToo era mean that the status quo over wayward personal conduct is no longer acceptable. After being exposed repeatedly by the media for their outdated and boorish behavior, the institutions that shape the commodities and underwriting markets – Lloyd’s of London and the London Metal Exchange – have banned daytime drinking altogether. The hope is that sobriety will foster better behavior, although the jury’s out on that.

That adults can’t be trusted to have an occasional drink and act responsibly is damning. Take Lloyd’s, the 331-year-old exchange for the world’s insurance market. It’s housed in Richard Rogers’s futuristic inside-out building, but that often seems like the only modern thing about the place. The few women who made it into the club have been subjected to humiliation and abuse. In a report by Bloomberg News, women were shown to be regularly on the receiving end of inappropriate remarks, unwanted touching, and assault. In many cases, those involved said alcohol was to blame.

After the Bloomberg article, Lloyd’s, which banned daytime drinking two years ago, said it would introduce a potential lifetime ban for bad behavior and commissioned an independent survey of its culture. Yet just this week a Lloyd’s insurance broker had to suspend two employees over a sexually suggestive email about a female colleague.

[Editor’s note: while the Corporation of Lloyd’s two years ago banned daytime drinking for its employees, the rules for individual businesses in the market varied. As a result, Lloyd’s in April began restricting people from entering Lloyd’s premises who are drunk or under the influence of drugs.]

The 142-year London Metal Exchange, or LME, also has a reputation for an unpleasant working culture. And on Thursday [April 13], it told its “open-cry” dealers that it expects them to apply a zero-tolerance alcohol policy – that is, no drinking during the day. The exchange had already introduced rules in April prohibiting its members from holding trashy parties at lap-dancing clubs and casinos.

It’s no coincidence that these two cornerstones of the old City are grappling with the same challenges. Before moving location in 2016, the LME was housed on the same road as Lloyd’s. Their members went to the same pubs in the historic Leadenhall Market.

Brexit Party leader Nigel Farage, who worked on the LME trading floor after leaving school, has recounted how he spent working days in the 1990s drinking and betting. Thanks to the revelations about rampant sexism and bullying, the LME and Lloyd’s have little choice but to try to catch up with the times. They now have to deliver on their promises to clean up.