Rapidly shrinking Swiss investment banking giant UBS is in the news again – and for perhaps the wrong reasons. First up its Broadgate Circle London head office was nominated a candidate for magazine Building Design’s Carbuncle Cup. Described by the FT’s architecture correspondent as ‘a stainless steel-clad monster – known as a ground scraper – [this] replacement, an over scaled chunk of horizontal city, looks like a second-rate sci-fi dystopia’.
Mind you, it’s less ugly than last year’s winner: the Walkie-Talkie.
Then a gossipy news website published ‘before’ and ‘after’ photos of its Stamford, Connecticut, dealing room, famously the biggest in the world in 2008 and the size of 23 basketball courts. Testament to over-arching ambition, it now stands almost empty, a Marie Celeste of its former self.
More relevant to technical analysts is last week’s story, also in the FT, that the bank has been using psychologists to beef up investment recommendations for its wealthy clients. With the ‘unbundling’ of research and trading costs in 2018, many are pondering ways to spice up what are usually dreary, gloomy, economic reports. Citi and HSBC have hired professional journalists and editors to tighten up the text.
Economists have latched on to the best bits of social psychology and re-branded it ‘behavioural finance’. UBS’s global head of research Juan-Luis Perez aims to help analysts think ‘differently’, ask more precise and ‘insightful’ questions, and avoid words so vague they are unhelpful (like ‘risky’). When ECB governing council member Yves Mersch said this weekend that ‘academic proposals seem to prefer sophisticated models to social psychology’ and that ‘we cannot fulfil our mandate with mathematical equations’ a problem is at least being recognised.
One wonders why so few banks have mixed technical analysts in to the brew; or managed to retain the excellent ones they had. Loved by retail clients, spread-betting and CFD firms offer charts as an essential part of any client package. They are clear, understood intuitively, and are an excellent aide-memoir of where we have travelled. Retail loves charts; pity those who have yet to latch on.