Well, at least it's summer. Paul Donovan, the UBS economist who's been put on leave after China took offence to his entirely innocuous comments about the country's swine flu crisis, will be able to catch some rays. Once he's achieved a tan, Donovan may yet decide that he'd prefer to work for something like a hedge fund instead of a bank in future.
For those who haven't been tracking Donovan's fate, the chief economist at UBS Global Wealth Management gave an audio briefing last week, in which he referenced the swine flu. "Chinese consumer prices rose. This was mainly due to sick pigs. Does this matter? It matters if you are a Chinese pig," said Donovan.
It turns out that it matters to Donovan too. Chinese social media users took offence to his phrasing and the state owned Global Times newspaper accused Donovan of using racist language. UBS has since been excluded from a $1bn Chinese bond deal and has sent Donovan home until further notice while it evaluates, "whether further steps need to be taken."
For 47 year-old Donovan, it's undoubtedly a bit of a shock. His entire career since graduating from Oxford University has been spent at the Swiss bank. Although he's presumably being paid to tend the garden, he's effectively been put out to pasture for something that was lost in translation and arguably not his fault.
For those who've had similar experiences at other banks, Donovan's experience is not atypical - all big banks would do something similar. It's a salutatory reminder of where banks' priorities lie. - Not with the individual employee.
“People don’t realize the kind of risk they’re taking when they work for these banks," says one banker who was put on leave from a rival organization for something that was also not entirely his own doing. "They have no idea how asymmetric the risk is if something goes wrong. When you work for a bank, you need to think long and hard about the fact that if the bank comes into the crosshairs of a government it will willingly sacrifice an individual employee if by doing so it could save hundreds of millions. Ask yourself, are you really worth $100m to the bank?”
Donovan has apologised for using “hugely culturally insensitive language,” to no avail. By jettisoning him, UBS is clearly attempting to save its standing with the Chinese government and avoid losing any more Chinese fees.
The whole episode is symptomatic of banks' fear of losing revenues in the current market, says the banker who had a similar experience . "If a 24-year-old government employee with a badge and three weeks' experience tells a bank to put 25-year veteran on leave for something that both don’t quite understand, it’s done. Banks are hurting so badly it’s almost reflexive now."
He says hedge funds and boutiques are safer bets as employers in the current market. "I wouldn't work again for a bank where you’re one of 20,000 employees who can be thrown to the dogs at whim.”
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