This is from Institutional Investor: Power 50 07 Jan 2009
The world's most influential people in finance. Picking the world’s most powerful and influential people in finance suddenly became a bit easier. The global eonomic crisis made the cutthroat world of finance even more Darwinian in the past year, as banks went bust, hedge funds imploded, and government regulators abandoned laissez-faire to seize vast tracts of the financial landscape. The result has been the most radical upheaval in the world financial order since the 1930s. We reflect that new order in the Power 50, our second annual ranking of the global financial elite. Ben Bernanke, the Federal Reserve Board chairman who has been rewriting the central banking handbook in a desperate attempt to avert a new depression, remains atop the list, followed by Jean-Claude Trichet, his European counterpart, who has been aggressively pumping cash into the banking system. Policymakers take six of the top ten positions in this year’s ranking, reflecting the greatly enhanced role governments are playing in bailing out or guaranteeing financial institutions. By contrast, many private sector players have been humbled by the crisis. Sir Fred Goodwin, the former Royal Bank of Scotland CEO who ranked No. 12 last year for his daring takeover of ABN Amro, disappears from our list after the U.K. government nationalized RBS and fired Sir Fred because of massive losses. Those who managed to navigate the crisis well, such as Banco Santander chairman Emilio Botín and hedge fund manager John Paulson, see their stars rise. 1 Ben Bernanke Chairman, Federal Reserve Board As a student of the Great Depression, Ben Bernanke always claimed that the Fed could use unconventional measures to prevent a repeat of that calamity. Now he’s putting his academic theories to the test. When he wasn’t helping U.S. Treasury Secretary Henry Paulson Jr. bail out Fannie Mae, Freddie Mac, AIG or the biggest U.S. banks, the Fed chairman was engineering an unprecedented expansion of the central bank’s balance sheet, buying up everything from commercial paper to mortgage-backed securities in a bid to unfreeze markets. In December he cut the Fed funds rate effectively to zero. Bernanke may need to save the world to save his job: He’s up for reappointment by President-elect Barack Obama later this year. 2 Jean-Claude Trichet President, European Central Bank Jean-Claude Trichet has worked hand in glove with Fed chairman Ben Bernanke to combat the credit crisis, striking a swap agreement in the aftermath of Lehman Brothers Holdings’ collapse to provide European banks with dollar funding. The Frenchman also greatly expanded the range of loans the ECB accepts from banks in a bid to unfreeze credit markets. The ECB came late to the rate-cutting game, though, slashing rates by 1.75 points, to 2.50 percent, in the last three months of the year after the European economy went into recession. He can expect pressure for more cuts in the months ahead. 3 Lawrence Summers Director-Designate, U.S. National Economic Council Lawrence Summers is proving there’s life after near-death in academia. Now he hopes to pull off a similar trick with the U.S. economy. Summers, the former Clinton administration Treasury secretary, resigned as president of Harvard University after losing the support of his faculty for appearing to question women’s intelligence. But he fought his way back into favor and advised Barack Obama during his presidential campaign. The 54-year-old prize-winning thinker, who believes the financial crisis demands aggressive fiscal action and is expected to exert immense influence as the economic power behind the throne, is preparing a massive stimulus package for the president-elect. 4 Wang Qishan Vice Premier for Finance, China As China’s top financial official, Wang Qishan places great importance on maintaining economic cooperation with the U.S., but he is bringing a new assertiveness to the relationship. After years of listening to U.S. demands that China revalue its currency, Wang in December told Treasury Secretary Henry Paulson Jr. that Washington should stabilize its economy to ensure the safety of China’s U.S. investments. There is little doubt his message was heard, given that China is the biggest foreign buyer of U.S. Treasuries. 5 James Dimon CEO, JPMorgan Chase & Co. At a time when most competitors are flailing, Jamie Dimon’s deft positioning of JPMorgan has made him the king of New York and the once and future savior of the U.S. financial system. His rescue of Bear Stearns Cos., with the Fed on the hook for up to $29 billion in losses, still looks to be a steal even at the revised price of $10 a share, and the addition of Washington Mutual makes JPMorgan the country’s largest bank in terms of deposits and market capitalization. Mounting losses in areas like credit cards, where JPMorgan is the nation’s biggest player, will test Dimon’s resolve. 6 Warren Buffett CEO, Berkshire Hathaway Even Warren Buffett is not immune to a market panic: Berkshire’s shares plunged 33 percent in two weeks in November, to less than $80,000 apiece, following mark-to-market losses on long-term put options the company wrote on the S&P 500 (the shares ended 2008 at $96,600, off 32 percent for the year). But Buffett, who once described derivatives as “financial weapons of mass destruction,” was one of the few with the will and the wherewithal to step in when financial markets imploded in September. The 78-year-old legend helped stabilize Goldman Sachs Group and General Electric Co. with timely investments of $5 billion and $3 billion, respectively. If capitalism survives, so will the Oracle of Omaha — and he’ll deserve some of the credit. 7 Emilio Botín Chairman, Grupo Santander Even a badly timed bout with Bernie Madoff can’t dim Emilio Botín’s achievement: The 74-year-old Botín proved his mettle as one of Europe’s top bankers, snapping up Alliance & Leicester and much of Bradford & Bingley to make Santander the third-largest U.K. bank by deposits. It also gained a U.S. foothold by buying Sovereign Bancorp for $3.81 a share. Spain’s housing market collapse and a €7 billion ($9.8 billion) rights issue halved Santander’s stock price, and the bank’s Optimal hedge fund arm had a $2.3 billion exposure to Madoff, but Botín’s bank ended the year with the second-largest market capitalization in Europe, after Britain’s HSBC Holdings. 8 Zhou Xiaochuan Governor, People’s Bank of China Rarely has a central banker had to shift speeds as rapidly as Zhou Xiaochuan did in 2008. The economist and career bureaucrat raised banks’ minimum reserve requirements five times in the first half of the year to contain inflation during the country’s pre-Olympic boom. But with a global recession hitting China’s exports late in the year, the central bank was quick to ease, cutting rates five times since September. Policymakers around the world are hoping that Zhou’s moves sustain Chinese growth, and that he does nothing precipitous with China’s record $1.9 trillion of reserves. 9 Timothy Geithner U.S. Treasury Secretary–Designate Few nominees to run the U.S. Treasury have been better prepared for office. As president of the Federal Reserve Bank of New York, Timothy Geithner worked with outgoing secretary Henry Paulson Jr. and Fed chairman Ben Bernanke on every major governmental crisis intervention, including the sale of Bear Stearns Cos., the bailout of American International Group and the fateful decision to let Lehman Brothers Holdings fail. Returning to Treasury, where he rose rapidly in the 1990s, Geithner will have an opportunity to see those moves through and, hopefully, prove he made the right calls. 10 Kenneth Lewis Chairman and CEO, Bank of America Corp. Vying with JPMorgan Chase & Co.’s James Dimon for the title of rescuer-in-chief, Kenneth Lewis picked up two troubled rivals — Countrywide Financial Corp. and Merrill Lynch & Co. The former purchase was a $4 billion bet that U.S. housing has a future; the latter, a $33 billion wager that investment banking — which Lewis famously said he’d had enough of in 2007 — isn’t dead yet either. Doubts about the deals pushed BofA’s share price down by 66 percent in 2008, but Lewis emerged with a stronger franchise — and was able to spend $7 billion to raise the bank’s stake in China Construction Bank to 19.1 percent. 11 Stephen Green Chairman, HSBC Holdings Stephen Green stood tall among his global banking peers in 2008, as HSBC maintained its profitability and reputation better than most. The bank, the world’s biggest by assets, enjoyed strong earnings in Asia, where it acquired Indonesia’s Bank Ekonomi Raharja. Green even turned a quick $250 million profit by buying HSBC’s London headquarters back from a troubled Spanish real estate company. HSBC’s strength enabled Green, alone among top British bankers, to avoid a bailout from the U.K. government or a costly capital injection from Middle East investors; he injected £750 million ($1.1 billion) of the group’s own funds into HSBC’s U.K. banking arm. 12 Dominique Strauss-Kahn Managing Director, International Monetary Fund Dominique Strauss-Kahn’s political skills and the credit crisis have made the International Monetary Fund a major player again after years of dwindling relevance. With a G-7 mandate to lend freely, the fund committed more money — $41.8 billion — in November alone than it had in the previous five years combined, fashioning rescue packages for Hungary, Iceland, Pakistan and Ukraine. Strauss-Kahn also ditched IMF orthodoxy to become an early and vocal advocate for aggressive fiscal measures to combat the economic crisis that fund forecasters seem to upgrade in severity by the week. 13 Lou Jiwei Chairman, China Investment Corp. A year ago, Lou Jiwei had to reassure Western audiences that CIC was a friendly, long-term investor rather than a threat after it made high-profile investments in the Blackstone Group and Morgan Stanley. But big paper losses on those stakes, a sharp decline in China’s stock market and government pressure have forced Lou to change tack and use the sovereign wealth fund to shore up domestic financial institutions. With CIC expected to receive a second $200 billion injection of government cash in 2009, investors will be watching his every move. 14 Josef Ackermann CEO, Deutsche Bank Josef Ackermann continues to outshine most of his peers, broadening Deutsche’s franchise and working on behalf of a beleaguered industry — and his bank. Ackermann called for tying compensation to long-term results and was one of the first top bankers to forgo a bonus for 2008. He lobbied successfully for an easing of Europe’s mark-to-market accounting rules and then reclassified troubled assets to keep Deutsche in the black through the first nine months of 2008. His purchase of 30 percent of Deutsche Postbank for €2.8 billion ($3.9 billion), with an option to gain majority control, strengthened Deutsche’s retail deposit base and balanced the group’s business profile. 15 Lloyd Blankfein Chairman and CEO, Goldman Sachs Group Even Goldman has finally been tarnished — dropping $2.1 billion in its fourth quarter, its first loss since going public in 1999. After the collapse of Lehman Brothers Holdings, he turned Goldman into a commercial bank to guarantee access to Federal Reserve funding, took $10 billion of capital from the U.S. Treasury, hit up Warren Buffett for another $5 billion and set a precedent by forswearing bonuses for himself and top executives. His firm remains the gold standard, but with revenues from advisory work, fixed income and principal investing drying up, Blankfein must find new ways to make money in a less-levered world. 16 Ho Ching CEO, Temasek Holdings With a $134 billion portfolio, Singapore’s Temasek was bound to feel the financial meltdown, but Ho Ching did better than most to cushion the blow. Ho, the wife of Prime Minister Lee Hsien Loong, negotiated a reset clause as part of Temasek’s $5 billion investment in Merrill Lynch & Co. in December 2007; when Merrill raised fresh equity in July, Temasek used the clause to halve its purchase price. The sovereign fund remained a coveted investor by contributing to capital raisings at the U.K.’s Barclays and Standard Chartered Bank, but in a sign of the times, Ho in November imposed salary cuts of 15 to 25 percent on senior managers. 17 Hamad Al Sayari Governor, Saudi Arabian Monetary Agency In charge of monetary policy for 26 years, Al Sayari is the rock upon which Saudi Arabia’s oil-based economy has been built. After ratcheting up rates and reserve requirements in the first half of the year to combat inflation, Al Sayari abruptly reversed course in the fall to counter a rapidly falling oil price and the global liquidity squeeze. His biggest long-term challenge is providing banks with sufficient liquidity to finance $400 billion in infrastructure investments, including the construction of six new cities meant to diversify the kingdom’s economy away from petroleum. 18 Jiang Jianqing Chairman and CEO, Industrial and Commercial Bank of China With China’s leaders spooked by the meltdown in Western financial stocks, Jiang Jianqing, 55, has refrained from making major acquisitions since paying $5.46 billion for 20 percent of South Africa’s Standard Bank Group in 2007. But the boss of the biggest Chinese bank — by assets and market capitalization — remains in an enviable position. ICBC’s earnings rose 46 percent in the first nine months of 2008 despite a $1.2 billion hit on U.S. subprime exposure, giving Jiang firepower to expand when conditions allow. The bank also opened branches in Doha, Dubai, Moscow, New York and Sydney. 19 John Paulson President, Paulson & Co. Everyone should have as good a down year as John Paulson had. The hedge fund manager couldn’t repeat the killing he made in 2007, when big bets against mortgage-backed securites helped the firm’s assets surge fourfold, to $28 billion, and earned the boss a cool $3.7 billion. But in a year when the industry suffered some of its worst losses ever, Paulson’s 12 funds were all showing year-to-date gains in late December, ranging from 7.12 percent to 37.98 percent; assets grew to $36 billion as of September 2008. By year-end, Paulson claimed to see signs of a bottom and started buying selected stocks and even some mortgage bonds. 20 Craig Donohue CEO, CME Group Chicago connections won’t hurt Craig Donohue in his bid for global dominance. CME, the biggest U.S. exchange by market capitalization, faced political and regulatory resistance last spring to its $9.4 billion bid for the New York Mercantile Exchange, but Donohue won hearty and pivotal support from then-senator Barack Obama and then-representative Rahm Emanuel, now the U.S. president-elect and his chief of staff. Now the CEO is seeking to wrest trading in credit default swaps from IntercontinentalExchange, which is affiliated with Wall Street firms annoyed by Chicago’s growing power. 21 Sheikh Ahmed bin Zayed Al Nahyan Managing Director, Abu Dhabi Investment Authority Sheikh Ahmed bin Zayed Al Nahyan stepped gingerly into the limelight. ADIA, the world’s biggest sovereign wealth fund, with assets estimated at $500 billion to $875 billion before the plunge in global markets, attracted attention when it paid $7.5 billion for 4.9 percent of Citigroup in late 2007; Citi’s shares dropped 77 percent during 2008, leaving ADIA with a hefty paper loss. In October, Sheikh Ahmed’s team led sovereign funds in drafting a statement of principles that called on the funds to be more transparent in return for open access to developed markets. It remains to be seen whether ADIA still has an appetite for those markets. 22 Mario Draghi Governor, Bank of Italy; Chairman, Financial Stability Forum Mario Draghi’s decisive leadership has transformed the Financial Stability Forum from an obscure gathering of international regulators into the leading body for overhauling the global financial system. With a mandate from the Group of Seven, Draghi, a former Italian Treasury director and Goldman, Sachs & Co. banker, has issued a bevy of recommendations calling on banks to bolster capital, improve risk management and align compensation to long-term results. Now he aims to bring emerging-markets representatives into the forum and revise the Basel II capital rules so they don’t worsen the credit crisis. 23 Baudouin Prot CEO, BNP Paribas Baudouin Prot may be mortal after all. BNP Paribas’s investment banking arm, which had traded profitably through the credit crisis, suffered a €1.6 billion ($2.2 billion) pretax loss in October and November, including a €350 million hit from the Bernie Madoff fraud. Prot did enjoy greater freedom of maneuver than most rivals, striking swiftly in October to buy Fortis Holding’s Belgian and Luxembourg businesses for €14.5 billion, but he must overcome a legal challenge by Fortis shareholders to complete the deal, which would enhance BNP’s European franchise and capital strength. 24 Robert Diamond Jr. President, Barclays Along with CEO John Varley, the native Bostonian is leading the latest British invasion of America thanks to Barclays’s pickup of bankrupt Lehman Brothers Holdings’ core U.S. assets in September. The deal strengthened the No. 1 debt underwriting franchise of Barclays Capital, the group’s securities subsidiary, and gave it an entry into the equity and M&A businesses. Diamond is arguably banking’s most powerful No. 2 man, overseeing Barclays Capital and giant Barclays Global Investors. The expansion came at a price, though. Determined to avoid a government bailout, Barclays turned to Middle Eastern investors for up to £7.3 billion ($11.8 billion) in high-priced capital. 25 Alistair Darling U.K. Chancellor of the Exchequer The 2007 collapse of Northern Rock exposed dysfunction among the U.K. Treasury, the Bank of England and the Financial Services Authority. But when U.K. banks faced a crisis of confidence after the demise of Lehman Brothers Holdings in September 2008, it was Alistair Darling and Prime Minister Gordon Brown who came up with a £37 billion ($54 billion) recapitalization that largely nationalized Royal Bank of Scotland and Lloyds TSB-HBOS. U.S. Treasury Secretary Henry Paulson Jr. flattered Darling by imitation, injecting $250 billion into U.S. banks instead of buying bad assets. 26 Brady Dougan CEO, Credit Suisse With rival UBS sorely stricken, Credit Suisse and its American CEO, Brady Dougan, have sought to grab the leadership baton in the Swiss banking race but suffered some stumbles of their own. Credit Suisse skirted the worst of the subprime mess, and in October Dougan turned down a capital offer from the Swiss government after raising $9 billion from investors, led by the sovereign wealth funds of Qatar and Abu Dhabi. The bank announced plans to slash 11 percent of its workforce after a $2.5 billion trading hit in October and November; executives who survive will have their bonuses tied to returns on a $5 billion pool of illiquid assets. 27 Sheikh Hamad bin Jassim bin Jaber al-Thani CEO, Qatar Investment Authority Qatar came late to the sovereign wealth game, but Sheikh Hamad is playing catch-up at a furious pace. The QIA, with an estimated $60 billion in assets, last year invested $6.4 billion in Barclays to enable the British bank to avoid a public bailout; it won a hefty 14 percent interest rate on the debt portion of the deal. It also took the lead role in a $9.2 billion capital injection into Credit Suisse in October. When he wasn’t spending the QIA’s billions, Sheikh Hamad, who is also Qatar’s prime minister and foreign minister, found time to mediate two truces between warring factions in Yemen and Lebanon. 28 Michael Diekmann CEO, Allianz Michael Diekmann has reshaped Europe’s largest insurer for what he hopes will be long-term growth, albeit at the price of some short-term pain. The CEO ended Allianz’s experiment in banking by selling Dresdner Bank to German rival Commerzbank in November for €5 billion ($6.5 billion), or €19 billion less than the insurer paid for it back in the headier days of 2001. In October he paid $2.5 billion for a stake in Hartford Financial Services Group, only to see shares in the U.S. insurer tumble by 50 percent because of investment losses. At least Diekmann’s big U.S. bond house, Pacific Investment Management Co., had a good year. 29 John Stumpf President and CEO, Wells Fargo & Co. John Stumpf began his career — appropriately enough — as a repo man. He now runs the fourth-biggest U.S. bank by assets, and the second-biggest by market capitalization. Wells Fargo’s daring October purchase of the failing Wachovia Corp. — which it snatched from Citigroup’s grasp without government aid — leaves it with $1.42 trillion in assets, 48 million customers and tens of billions of dollars worth of problem mortgages to work out. Still, Wells’s shares edged up 1 percent in 2008. All Stumpf needs to do now is get out from under the shadow of chairman Richard Kovacevich, 65, who postponed retirement to focus on Wachovia. 30 William Gross Managing Director and Co-CIO, Pacific Investment Management Co. Among those who got it right is Bill Gross, who warned of problems at Freddie Mac and Fannie Mae early and often, and said that the federal government would need to make its implicit guarantee of the pair explicit. The former blackjack professional was so confident the agencies were too big to fail that he bet a big chunk of the $132 billion Pimco Total Return Fund on their paper; when the government rescued the mortgage lenders in September, the fund gained $1.7 billion in a single day. Such astute calls helped Total Return, the world’s largest bond fund, post a 4.82 percent gain in 2008. 31 Mohammed Al Gergawi UAE Minister of State for Cabinet Affairs, Chairman of Dubai Holding Mohammed Al Gergawi remains arguably the second most powerful man in this ambitious emirate thanks to his close relationship with Sheikh Mohammed bin Rashid al Maktoum. He chairs the ruler’s Executive Office as well as Dubai Holding, the corporate umbrella for Sheikh Mohammed’s infrastructure and investment projects that serves to promote the emirate’s development. But with debt concerns and a slowing Gulf economy dulling Dubai’s luster, Al Gergawi is having to curb his appetite for deal making, at least for now. 32 Laurence Fink Chairman and CEO, BlackRock Few financiers have found as much opportunity in the credit turmoil as has BlackRock’s Laurence Fink, even if his firm, the biggest publicly traded U.S. fund manager, couldn’t avoid taking some hits — assets fell by nearly 12 percent in the third quarter, to $1.26 trillion. The Federal Reserve Bank of New York tapped BlackRock to work out $29 billion of toxic assets owned by Bear Stearns Cos. and $20.8 billion of assets owned by American International Group. Fink, who helped pioneer mortgage-backed bonds in the 1980s, hopes to continue to thrive under new ownership; Bank of America now holds 49 percent of BlackRock after buying Merrill Lynch & Co. 33 Henri de Castries CEO, AXA Henri de Castries began 2008 by acquiring an insurer in Mexico and buying out minority interests in its Turkish subsidiary, but ended the year bowing to the global credit crisis. In November the CEO scrapped his target of tripling earnings by 2012 and admitted that 2008 profits would fall by a billion or so from the $4.96 billion that AXA earned in 2007. Even so, Europe’s second-largest insurer by market capitalization remained in the hunt to buy assets from American International Group. 34 Bader Al Sa’ad Managing Director, Kuwait Investment Authority The KIA, which disclosed holdings of $264 billion in March 2008, invested a total of $5 billion in Citigroup and Merrill Lynch & Co. last January, but Bader Al Sa’ad had to face the wrath of local politicians when the banks’ stocks tanked. After a banking crisis hit Kuwait’s stock market in October, the KIA, at the government’s request, came up with a plan to buy up as much as 10 percent of the market. 35 Tony Tan Keng Yam Executive Director, Government of Singapore Investment Corp. Tony Tan served as a bellwether for the shifting focus of many sovereign wealth funds in 2008. Early in the year, Singapore’s GIC helped shore up UBS with a $9.57 billion investment and put $6.9 billion into Citigroup. But with bank stocks plunging during the year, Tan moved to put more of GIC’s money into hedge funds, private equity and other alternative investments. According to its first-ever public annual report, released in September, GIC has generated annual average real returns of 4.5 percent over the past 20 years, but the fund still declines to disclose its size. Best estimate: $300 billion or so. 36 David Einhorn Founder and President, Greenlight Capital The short-seller Wall Street hated most got the big call right in 2008. David Einhorn took heat from Lehman Brothers Holdings for shorting its stock and questioning its financial health. He would be proved correct, of course, but couldn’t take further advantage when the feds let Lehman collapse in September because regulators had imposed a temporary ban on short-selling. Greenlight suffered big losses when Einhorn got caught in a short squeeze at Volkswagen. When he wasn’t shorting stocks, Einhorn was campaigning for fundamental market reforms, including nationalizing rather than propping up weak banks. 37 Nobuo Kuroyanagi President and CEO, Mitsubishi UFJ Financial Group After nearly two decades in retreat, Japanese banks, led by Nobuo Kuroyanagi, are making a dramatic return to the global stage. Mitsubishi UFJ, the biggest of Japan’s megabanks, with $1.8 trillion in assets, paid $9 billion for 21 percent of Morgan Stanley at the height of the financial crisis in October. Now Kuroyanagi needs to show that scale brings profits to fulfill his aim of making the bank one of the five biggest global financial institutions by market value. 38 Roberto Setubal CEO, Banco Itaú Holding Financeira Talk about bold. With Itaú’s domestic franchise threatened by Banco Santander’s acquisition of Brazil’s Banco Real and the financial crisis hitting the Brazilian economy, Roberto Setubal swooped in to buy rival Unibanco Holdings in a $12.5 billion stock swap in November. The new Itaú Unibanco Holding will stand well clear of rivals Real, Banco Bradesco and Banco do Brasil, with $265 billion in assets. Setubal aims to make Itaú a global player in five years. 39 John Mack CEO, Morgan Stanley Credit John Mack’s aggressive leadership for keeping Morgan Stanley alive and in one piece. Despite a $2.36 billion fourth-quarter loss, Morgan Stanley turned a profit during a tumultuous year in which its shares plunged 70 percent. But 73 years after splitting off from J.P. Morgan in the midst of the Great Depression, the firm became a commercial bank once again in September — to survive. It also secured a $9 billion capital injection from Mitsubishi UFJ Financial Group, which gave the Japanese bank a 21 percent stake. 40 Duncan Niederauer CEO, NYSE Euronext Since taking over from John Thain in November 2007, Duncan Niederauer has raced to bolster NYSE Euronext’s franchise. He has upgraded technology to counter the erosion of the company’s market share in equity volumes and expanded full speed into derivatives. NYSE Euronext boosted its options business with the acquisition of the American Stock Exchange and became the first exchange to offer clearing of credit default swaps index trading, via its London-based Liffe unit. But the fact that Niederauer held merger discussions in the fall with rival Deutsche Börse suggests that more dramatic moves may be needed. 41 Kenichi Watanabe CEO, Nomura Holdings Promoted in April after losses on U.S. subprime securities caused predecessor Nobuyuki Koga to resign, Kenichi Watanabe moved aggressively to restore Nomura to global prominence. Watanabe, who had run the firm’s domestic brokerage business, bought the Asian and European operations of Lehman Brothers Holdings for $2 billion, most of which was used to retain bankers. Watanabe called it a once-in-a-generation opportunity that would return Nomura to profitability by 2011 — if, that is, he can meld Lehman’s brash ways with Nomura’s egalitarian culture. 42 Barney Frank Chairman, U.S. House Financial Services Committee The veteran Democratic politician played a key role in forging the U.S. government’s financial and auto industry rescues, including giving Treasury Secretary Henry Paulson Jr. leeway to use the $700 billion Troubled Asset Relief Program to recapitalize banks rather than just buy dud loans. Under an Obama administration, Barney Frank will be in a strong position to push his agenda of tighter regulation and greater relief for homeowners. 43 Prince Alwaleed bin Talal Chairman, Kingdom Holdings Co. Vikram Pandit couldn’t ask for a more loyal shareholder. Prince Alwaleed stumped up cash twice for CEO Pandit’s Citigroup in 2008, investing in a $12.5 billion preferred stock issue and then promising to buy more shares to rebuild his stake to 5 percent. Citi’s stock price plunged 77 percent in 2008, leaving Alwaleed with a hefty paper loss; his Kingdom Holding conglomerate dropped 61 percent. But Alwaleed remains Saudi Arabia’s most-watched investor. 44 Nouriel Roubini Economics Professor, New York University’s Stern School of Business Derided as an alarmist in 2006, when he first began predicting that a U.S. real estate crash would cause banking failures and a deep recession, former Clinton administration adviser Nouriel Roubini saw his stock soar in 2008, as events matched his scenario. Roubini continues to live up to his nickname of Dr. Doom, forecasting a drop of as much as 5 percent in U.S. output in 2009, a further 20 percent–plus fall in the Dow Jones industrial average to about 7,000 and global credit losses climbing to $2 trillion. Happy New Year! 45 Reto Francioni CEO, Deutsche Börse Reto Francioni resisted pressure for asset sales from activist shareholders at the Children’s Investment Fund Management (UK) and Atticus Capital and maintained earnings growth despite a drop in trading volume, but the boss of the world’s most valuable stock exchange still faces big challenges. Deutsche Börse had inconclusive merger talks in the autumn with rival NYSE Euronext, a deal that could have helped Francioni cut costs and gain scale to fend off competition from rival platforms. Now the CEO is focusing on growth and, like his rivals, targeting credit default swaps as a potential opportunity. 46 Stephen Schwarzman Chairman and CEO, The Blackstone Group Blackstone reported a third-quarter loss of $502 million, and its share price has dropped 80 percent since its 2007 initial public offering. Yet its advisory business is growing rapidly, and the private equity giant has plenty of cash on hand because its deal-making machine nearly ground to a halt in 2008. His defining moment two years ago was the lavish 60th birthday party that he threw for himself. His most memorable moment in 2008 was advising U.K. Prime Minister Gordon Brown on how to fix the credit crisis. 47 Robert Zoellick President, World Bank A surge in food and fuel prices followed by a vicious economic slowdown prompted Robert Zoellick to aggressively use the bank’s resources, and its bully pulpit, in 2008. The bank in April approved $1.2 billion in fast-track food aid, and in December it created a $2 billion facility to speed lending to countries hit by the financial crisis. With the bank forecasting a contraction in world trade in 2009 — the first since 1982 — and global growth of just 0.9 percent, Zoellick will be pressed to spread the bank’s resources around. 48 Christopher Hohn Founder and Managing Partner, The Children’s Investment Fund Management (UK) Although Christopher Hohn suffered some rude setbacks last year, the 42-year-old activist still strikes fear in the hearts of corporate managers. London-based TCI’s $15 billion portfolio fell nearly 26 percent through the first nine months of 2008, the first big decline since Hohn launched the fund in 2004. In November, TCI sold its 9.9 percent stake in Tokyo-based Electric Power Development Co. to the company at a loss — a rare defeat for Hohn. But he did get a seat on the board of U.S. railroad group CSX Corp. and force a change of chairman at Deutsche Börse. 49 Yngve Slyngstad Executive Director, Norges Bank Investment Management Yngve Slyngstad got a rude welcome after taking over Norway’s Government Pension Fund – Global, the world’s second-largest sovereign wealth fund, in January 2008. Faced with a government mandate to raise the equity allocation while adopting a more activist strategy in a bid to bolster returns, Slyngstad took a hit when world markets tumbled. The fund fell 7.7 percent in the third quarter, but with $307 billion in assets, Slyngstad still has buying power. 50 Vikram Pandit CEO, Citigroup Barely a year into his new job, Vikram Pandit has already earned the dreaded designation of “embattled” leader. The giant bank’s assets are weighted toward the vulnerable mortgage and consumer credit markets, and Citi needed a gargantuan government bailout — $45 billion in capital and $306 billion in guarantees — to stay afloat. Not all of this can be laid at Pandit’s door, but he did not drape himself in glory with his abortive bid for Wachovia Corp., which was snatched away by Wells Fargo. Still, Citi continues to hold some $2 trillion in assets and has a legacy as a cash machine. ----------------------- Jayson Funke Graduate School of Geography Clark University 950 Main Street Worcester, MA 01610 _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
