Shadow Banking

by C. M. Albright

  He was about to take a first step along the landing when there was that familiar creak on the second step of the stairs. It was a creak that he had heard so many times before. It had creaked like that for as long as he could remember; he used to avoid treading on it altogether when returning late and drunk from parties when he was still at school and didn’t want to alert his parents to his inebriation. Someone was coming up the stairs. He looked down into the stairwell. It was difficult to make out who it was at first but as the light from downstairs cast the figure into a silhouette, Al could see that it was Miles. What was he doing? There was a toilet downstairs. He didn’t need to come upstairs to the bathroom. Silly bastard. And great timing too. But Miles wasn’t going to the bathroom; he walked straight past it and went into the guest bedroom and closed the door after him. In the brief blink of light as the door was open, Al could see over Miles’s shoulder that Imogen was sitting up in bed. She was smiling. Instinct led him down the landing a few paces. He had to stop Miles; this was a mistake. This wasn’t meant to happen. But she was smiling. She was welcoming. Al stopped. For a moment, it felt as though his legs might give way and he would fall to his knees. From behind the door, he could hear Imogen’s giggling and Miles’s voice, soft, subdued, whispering, cajoling.

  Al turned around, walked back to his bedroom and sat on the bed. It was only when he looked up from cradling his head in his hands and looked at his reflection in the mirror that he realised that he was crying, tear tracks glistening on his cheeks just as they had done when he had sat in this exact same position as a boy when he was dropped from the football team, when he was bullied at school, when he had broken up with his first girlfriend. His years as a student, his time at Trenchart Colville, all of it melted away.

  Sleep was never going to come. Al spent the night lying on his back tracing the cracks in the ceiling above his bed. By the time it grew light outside, his shock and sorrow had given way to anger and jealousy. How could Miles and Imogen do this to him? In his parents’ house, his family home. Every time he closed his eyes, he could see that image of Miles standing in the doorway and Imogen smiling at him. It felt as though he was suffering from post-traumatic stress. This would take some recovering from but in the meantime, he would require acting abilities worthy of an Oscar winner. There was no way that he would allow Miles and Imogen to know what he knew. He would watch them, safe in the knowledge that they didn’t know. He would watch them and he would hate them. Hate them and yet love them at the same time. It was this that surprised him most about his feelings of having been betrayed – the feeling that he had not only lost the love of his life but also his best friend. Miles was someone that he had grown increasingly close to over the past few months. He didn’t feel as relaxed with him as he did with Fergal – it wasn’t that sort of relationship – but it was a friendship based on mutual support and mutual understanding that they were fighters; they would fight together and if needs be protect each other. They were a team. Were. Not any more.

  Finally, his exhaustion overcame him but no sooner had he fallen asleep than his father was at his bedside.

  ‘Al, you’d better come downstairs.’

  Al blinked and yawned: ‘What’s the matter?’

  ‘It’s easier if I show you.’

  As Al climbed out of bed and he followed his father along the landing and down the stairs, it occurred to him that he probably should have stayed up and tidied away after his guests’ late night drinking antics.

  ‘Dad, if it’s about the mess, I’m sorry. I’ll clean it up, don’t worry.’

  His dad stopped on the stairs and turned around. It was a strange expression on his face. It was one of concern but there was something else there too. Al couldn’t work out what it was. Was it amusement?

  ‘It’s not the mess, it’s what’s on the kitchen floor.’ In response to his son’s enquiring expression, he said: ‘I’ll show you.’

  And he did. As they entered the kitchen, Al felt a certain sense of relief when he saw that it was just Fergal unconscious on the floor but his relief soon turned to shock when he took in the full details of Fergal’s situation. He was naked, clutching a lingerie supplement from the Mail on Sunday in one hand and an empty bottle of Tia Maria in the other. As Al and his father stood over the body, Fergal added his own special effects by violently breaking wind.

  Al turned to see his father’s shocked expression: ‘Sorry Dad, this does happen with Fergal sometimes. I’ll clean up before Mum comes down.’

  ‘Too late, it was your mum that found him.’

  ‘Oh shit.’

  Al’s hopes of an idyllic weekend by the sea were now trading at a severe discount to par.

  Nasdaq: 1216

  USD/CHF: 1.2505

  Rarely had Al seen Poole harbour look so beautiful. The sun shone; the sea was picture book blue with frothy white-tipped waves. A brisk south-westerly was keeping the thirty footer that he had borrowed from his old boss at the boatyard slicing through the spray. After a brief training session, Rhys was proving to be something of a natural on the tiller. The combination of a hangover, seasickness and shame had left Fergal slumped against the gunwale with his head over the side retching every now and again. Sailing, especially here, was one of the great pleasures of Al’s life. But today, there was no pleasure. Miles and Imogen had put paid to that. He watched them. How well they acted; how well they lied.

  As the yacht carried them between Brown Sea Island and Sandbanks, Miles pointed at the big seafront houses on Panorama Road, the homes of industrialists and millionaires. Al couldn’t hear what it was that Miles was saying to Imogen – his words were lost in the wind – but whatever it was, he guessed it was aspirational, something related to how he might one day like to live in a place like that. Whereas under normal circumstances, he could relate to Miles’s aspirations and maybe share them, now Miles’s ambition and his greed sickened him and he vowed to himself that one day he would hurt Miles just as much as Miles had hurt him. But how to hurt Miles Ratner? All of his life was predicated on success and the accumulation of wealth. So, if that’s what it took, Al would have to achieve more of both. But even as Al thought this, he realised the gargantuan nature of this task. Miles’s career was clearly on the fast track. Al was doing well but Miles was in a different league. Al wasn’t a vengeful person, quite the opposite; nevertheless, he vowed that he would do whatever it took to ensure that Miles Ratner paid back what was owed.

  ‘Why didn’t you tell me?’ asked Al when he and Miles were alone in the car.

  ‘Tell you what?’ ‘Don’t. Just tell me why.’

  ‘You mean Imogen.’

  ‘Of course I mean fucking Imogen.’ He sounded so much more hurt and bitter than he had intended but it was a perfect reflection of how he felt.

  ‘It’s nothing serious.’

  ‘How long has it been going on?’

  ‘Few months.’

  Months? All that time he had been hoping there might be a chance for him and Imogen she had been fucking Miles Ratner all along.

  ‘You were the one who started bleating on last year about how I should have told you that Imogen and I were together and now that the boot’s on the other foot, you don’t practice what you preach. So, go on, why didn’t you tell me?’

  ‘It didn’t seem worth it. It isn’t that serious like I said. And I didn’t want to hurt you. Everyone knows that you’re very fond of Imogen.’

  They were making their way down North End Road. They weren’t moving fast, no more than thirty miles per hour, but fast enough that when Al stamped his foot on the brake they were thrown forward in their seats. Al wasn’t sure whether he was going to open the passenger door and push Miles out or whether he was going to punch him.

  ‘Al, I’m sorry. I know this is difficult but I’m sure we can get through this and still be friends.’

  Al had reached a decision; he was going to punch him. Nothing else would provide him with the necessary satisfaction. If there was a fight
then so be it. He didn’t care anymore. But whatever it was that prevented him from carrying out his intention, it had nothing to do with a desire to be conciliatory. Far from it. Nonetheless, it made him hold out his hand.

  ‘Congratulations.’

  Miles took his hand and shook it. ‘Thanks. For a moment there I thought you were going to throw me out of the car.’

  ‘No, I was going to punch you.’ Al forced a laugh. Miles smiled. ‘I’m pleased for you. Imogen and I were never going to work out so I wish you both all the best.’

  ‘No hard feelings?’

  ‘None.’

  Al stirred the gearstick into first and set off once again, feeling better than he had done all day. He had never realised that lying could be so liberating.

  9 Comp

  Fed Funds: 5.25%

  USD/JPY: 116.35

  1996 had been a good year for Trenchart Colville, especially in sales and trading. A raft of new clients coupled with some excellent risk management had produced a record year for the treasury division. The big day had arrived, the one day in the year that mattered to everyone. Bonus day.

  The air of tension in the office was palpable. As with any good poker game, everyone kept a lid on their emotions and maintained blank expressions as if this was just any other day. But this was the day when you got paid and/or promoted. Fergal and Al were huddled together discreetly watching their colleagues coming out of a side office. Al was the only member of the bank Fergal felt he could talk to about his bonus, or ‘compensation’, as it was euphemistically termed. Theirs was a friendship that transcended bank politics even though they both knew that it was off limits to discuss their own remuneration. Fergal would never dream of discussing comp with Miles. He would be more likely to discuss masturbation techniques with Daniel van der Wuithuisen. Bonuses were, after all, more than just about money. The amount that you received was all about how much you were valued by the bank for the year to come. Paying for business that had already been done was a waste of time. Compensation was completely discretionary. Bonuses were paid to ensure the future commitment and high performance of an employee.

  ‘Look at him,’ said Fergal, nodding at Rhys – the little fella – as he emerged from the office and walked off, his mask of blank insouciance firmly in place. ‘He’s clenching his buttocks. I reckon he’s done pretty well.’

  ‘You’re up next,’ said Colin, one of Fergal’s colleagues on the spot desk as he walked past a few minutes later. There was something about his smile that made Fergal think that it was possibly fake, that poor old Col hadn’t got what he’d hoped for.

  He surprised himself with how nervous he felt as he walked into the office where Keith was sitting at the table in front of various pieces of paper, all of them placed text down on the table, apart from one, which had Fergal’s name written across the top of it.

  ‘Fergal.’

  ‘Keith.’

  Keith picked up the piece of paper with Fergal’s name on and held it up, looking at it as he reclined in his seat and sucked his teeth.

  ‘Thanks for coming in, Fergal. I guess you know why you’re here.’

  ‘I know Keith, you’ve always harboured feelings for me and you can’t cope with living a lie any more. Shall I drop the blinds and assume the position?’

  ‘Funny.’ Keith perused the piece of paper for a few moments longer to prolong the agony. ‘You’ve had a good year, Fergal, you’ve become an integral member of the team. Your total compensation for 1996 is a hundred thousand pounds made up of forty thousand as your salary alongside a bonus of sixty.’

  Fergal had hoped for a bonus of fifty; he wouldn’t have been upset with forty but sixty was better than he might have hoped for. He crushed the developing smile between his lips. Show no emotion, but it was hard not to when Keith said: ‘And we’d like to raise your salary for next year to sixty grand.’ After tax, sixty grand translated into more than three grand in his pocket a month. Holy shit, that was serious money. Not two years before he had been living on a student grant of four and a half grand a year.

  ‘Over the past couple of years you’ve developed into a key member of the team,’ said Peter Bischoff, the head of sales, to Al later on that afternoon. ‘Your ability to build relationships with clients is developing well and you’re popular and well respected by the traders. Your total salary for 1996 was forty thousand pounds and we’d like to top that up with a hundred thousand pounds bonus. For next year, we’d like to increase your base salary to sixty thousand. Congratulations.’

  Al was gutted. It might have been a huge sum of money. It would be the largest amount that he’d ever received in one go in his life. But everything was relative and by the time he was smiling at Peter and telling him thanks, his brain had finished its calculations. He was probably earning more than many other colleagues at TC but he still couldn’t help but feel that he deserved more. The revenue that he had earned for the bank in 1996 was in excess of two million quid. Was that really only worth a hundred grand? All those ideas, all that analysis, all that hard work and it all boiled down to a hundred grand. The more he thought about it, the worse he felt.

  Miles didn’t look up from his computer screens to watch the bonus day parade. He didn’t care about other people’s money. It was just another day at the office. Whatever they offered him, it could never be enough. Trenchart Colville had served its purpose; it had given him a start – and more importantly, it wasn’t New York. It had been good training too, he’d met some great people and it had helped him focus on what he wanted to do with his career. But there was no bonus big enough to make him stay there. It was not about money.

  When the time came, Nick Stevens took Miles through to see JJ in his office. Being Miles’s line manager, Miles had expected Nick to talk to him about his compensation so JJ’s involvement was a sign of the standing that he was held in at the bank. Not that it mattered. Miles just wanted to hear quite how important he was to Trenchart Colville. Hope for the best, prepare for the worst. Just like trading.

  ‘As you know,’ said JJ with a half-smile, ‘there are banding caps for employees in terms of compensation at different levels of service, to give direction to employees. But in your case, Miles’ – the smile broadened – ‘we’re going to make an exception given the stellar performance of the options desk of which you are an integral part. Usually, we don’t permit bonuses to be more than three times base salary but again, in your case, Miles, we want to do something a little bit different, so your base salary will rise to sixty thousand pounds and your total compensation for 1996 will stand at two hundred and forty thousand pounds.’

  It was unprecedented for Trenchart Colville to give a twenty-five year old a bonus of that level. It made him think of his father. He had gone to prison for less than that. But considering the options desk had made over twenty million pounds in 1996, it wasn’t so much. Nick would probably get about half a million given his eight years of service to the bank. Overall, the desk’s total bonus pool would be less than one million for twenty million profit.

  Miles couldn’t help a smile – JJ would think it was born of gratification at the size of his bonus – but it was far from that. It was a smile of acknowledgement that the bank – as his grandfather would have put it – ‘was simply not willing to piss in the tall weeds with the big dogs.’ The top brass at Trenchart Colville were just playing at investment banking. This is what banks had always done – underpaid the big performers as they had to carry the under-achievers. He had already been contacted by a couple of leading head-hunters about making a move to bigger banks and conversations were ongoing.

  As Miles walked out of JJ’s office, he looked across at Nick Stevens and the same thought must have been playing on his mind too. He smiled at Miles as he sat back down at his desk and said, ‘Don’t worry, mate, it’s all in hand.’

  After everyone had received their numbers, the air of anti-climax in the office lingered like a bad smell. All the levels of expectation had collapsed
and would flat-line for a few hours at least until they would begin their gradual inexorable rise in time for the forthcoming year’s bonus day.

  By 4pm, the Golden Hind was packed with Trenchart Colville employees and Miles, Al, Fergal, the Little Fella and Imogen continued their bonus day poker game. Everyone was cheerful, everyone wanted to make it appear as though they were happy and in some cases – Fergal’s for example – the good cheer was genuine; but not for others. Imogen’s smile was too big and it was clear to Al that she had been screwed.

  What was she doing there? This wasn’t the right place for her – and as he considered this while sipping on a pint of London Pride, he felt his protective feelings for her resurface once more. Then, just as they did so often, Miles and Imogen both made their excuses within a few minutes of each other and left. Al thought about them meeting up around the corner from the pub just as he had met up with Imogen all those many times before when they were trying to keep their relationship a secret and revelling in the clandestine secrecy of their illicit liaisons. He couldn’t help his jealousy. It no longer upset him that he felt it. Though still painful and wretched, it had become a reassuring constant in his life of late. The fact was that any bonus would never be enough to compensate for the way that he felt about Imogen.

  Al was wrong about Miles and Imogen leaving the pub separately and meeting up around the corner. Imogen was making her way to Bank tube station on her own. She was hurrying, her haste and bustle an attempt to prevent passers-by from realising that she was crying. Her bonus was a meagre twenty grand with a ten grand pay rise. In the world of the City, it was nothing, a slap in the face. They might as well have given her her P45. But what staunched the tears, at least temporarily, was that in the real world, the world outside the walls of the fortress, twenty grand was a lot of money. On top of her salary, she had earned sixty thousand pounds that year. It was enough to escape on. She could go travelling, work out what she wanted to do with her life. But every time she thought about quitting, leaving the City, she couldn’t help but think about her sister, George, and her family. What would they all make of it? They would hide their disappointment behind a façade of niceness, but she couldn’t face that. Maybe that wasn’t fair on her father. He didn’t want her to work in the City in the first place. But as for her mother and sister, that’s exactly how they’d behave.