‘Blue blood’ monopoly

Snobbish investment banks are barring nearly all but the very wealthiest from entering the industry thanks to unforgivable infractions – like wearing brown shoes, speaking with the wrong accent and not possessing the right kind of “aura”, a study into social exclusion has found.

One interviewee told the Social Mobility Commission, which conducted the report, that at some banks “the concept of diversity is about taking a different year group from Eton or from Harrow; if some of the departments are really ambitious they might include St Paul’s and Westminster school.”

Unite national officer for finance Rob McGregor said the findings reflected a “blue blood” monopoly – which also features to a lesser extent in the higher echelons of retail banking – that was, in part, to blame for the financial crisis.

“There were a lot of different factors that contributed to the 2008 economic collapse, so it would be churlish to lay all the blame on a particular group because greed occurs in every class, but this elitism isn’t good for the sector, the economy or our society,” McGregor said.

“It creates a very narrow perspective because everyone mixes with the same groups and has a similar sense of entitlement, standing and expenditure.

“It encourages the pursuit of wealth at any cost – as evidenced by the predatory investment bank schemes that were a major cause of the financial meltdown.”

Unfortunately the lack of diversity within investment banking – where 70 per cent of new entrants to the private equity sector have been privately educated, despite only seven per cent of the population attending fee paying schools – is getting worse, the report said.

Increasingly, successful candidates are expected to have rich and powerful parents who can be of benefit to the banks, should have completed a number of unpaid London based banking internships whilst attending an elite secondary school and display a host of extra-curricular activities on their CV.

Judged

On top of this they are judged on an “aura” stemming from an intrinsic knowledge of the etiquette, dress and social mores of wealthy society, which the report states is “unknowable” for candidates not immersed in that world.

Without the list of attributes even first class graduates, who have attended the handful of elite universities that investment banks recruit from, are likely to see their ambitions quashed.

“It is important to note again that these processes are becoming more pronounced within the sector. Banks acting alone may be reluctant to reverse this trend for fear of their competitors capturing all the ‘best’ candidates at an early stage,” the report said.

One interviewee said the process of selecting the most privileged is “not nepotism the way we actually think about it. It’s actually very calculated, profit-motivated, rational thinking.”

McGregor, however, said that such myopic profit seeking, and the “casino capitalism” it encourages, is not healthy for the rest of the society; including for the thousands of low paid bank branch workers who also suffer when the gambling goes wrong.

He said, “It is in society’s interests that those at the top should have a broad based view of the world and some understanding of those who are less privileged.

“Right now it’s an aristocracy, rather than a meritocracy. If the investment banks are serious about cultural change, and avoiding the privileged entitlement that helped lead to the financial crash, they would open up the talent pool to people from different walks of life.”