From Publishers Weekly
Augar's The Death of Gentlemanly Capitalism
(2001) described how the cozy club of British merchant banking collapsed due to mismanagement and scandal. It was an insider's account; Augar was the head of Schroder Securities, a London merchant bank founded in 1804. (He sold the company to U.S. financial services giant Citigroup.) This book takes stock of similar doings on this side of the Atlantic. While many firms have met ignominious fates in the past few years, Morgan Stanley, Goldman Sachs and Merrill Lynch managed to avoid the worst of the scandals; through what Augar sees as superior management, they command investment banking. Three other firms, Lehman Brothers, Salomon Brothers (now part of Citigroup) and First Boston (now part of CSFB) proved "impossible to kill," making what Augar characterizes as huge errors but somehow surviving as a solid second tier. Finally, JPMorgan and Bear Stearns—along with two European banks that made U.S. acquisitions, UBS and Deutsche Bank—managed to find niche positions near the top. Despite the inflammatory title and cover, the author offers only mild and familiar criticisms: bankers are overpaid, the industry is too powerful and banks sometimes put their own interests above their clients (or one client's interests above another's). The heavy reliance on anonymous personal interviews of bankers gives a strong inside feel to the story, but one that undercuts its power as objective journalism. (On sale Apr. 25)
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His career in investment banking sets the stage for Augar's tell-all book about this industry in which the large U.S. investment banks dominate every large capital market. In questioning the existence of an investment-banking cartel, he asks if a few firms make excessive returns, keep prices high, act together? We learn about the "Edge," which Wall Street has, because Wall Street can monitor market movements as they happen. The large investment banks gather an extraordinary amount of knowledge through their massive participation in global stock exchanges and through the wide array of products they sell. Their superior knowledge and power stack the odds in their favor, and the author contends that it is the general public that provides all the rich rewards garnered by the investment banks' employees and shareholders. As a character in the movie Wall Street
declared, "Greed, for want of a better word, is good. Greed is right. Greed works." A provocative book. Mary WhaleyCopyright © American Library Association. All rights reserved