High Financier: The Lives and Time of Siegmund Warburg

By Niall Ferguson

A book review by James Faulkner of WatsHot.comHigh Financier: The Lives and Time of Siegmund Warburg by Niall Ferguson can be purchased for GBP 30 by clicking here.

I should say that I am a self-confessed Fergusonite - I even attended the accompanying lecture to this book in St Paul's Cathedral - so it should come as no surprise that I enjoyed reading High Financier. Ferguson is a good example of that rare breed of historians which possess literary flair as well as depth of perception. In short, Ferguson is a storyteller as well as an educator, and his latest offering scores highly on both counts.

Most people have probably not heard of Siegmund Warburg - in fact, I must confess that I had not until the advent of this book. In the aforementioned lecture, Ferguson cited a lack of knowledge of economic history amongst financial practitioners as one of the main factors leading to the recent financial crisis. (Of course, Ferguson, an economic historian, would say that wouldn't he? But I don't disagree with him.) Somewhere along the line, bankers, possibly intoxicated with the apparently endless stream of money coming their way, broke that most fundamental of bonds: the relationship with the client. One can observe the de-personalisation of banking across the entire spectrum of the industry, from the way retail bankers have morphed into car salesmen, to the splicing, dicing and parcelling of mortgages into CDOs and their subsequent trading as some form of abstract commodity. These people would do well to read High Financier.

Siegmund Warburg was born in Imperial Germany in 1902. After seeing the devastation wreaked upon is homeland in the First World War and most of his inheritance lost by his father in the hyperinflation of the early 1920s, he joined the family banking firm in Hamburg in the hope of making enough money to enter politics. However, the tumults of the early 1930s brought the firm to its knees, and Siegmund eventually made the (wise) decision to emigrate to England after Hitler came to power. Warburg overcame his parvenu status (not a mean feat in the stuffy City of the 1930s) to build a banking business that would be accepted into the top echelons of the City by the 1950s, along with names such as Rothschild and Lazard.

Ferguson credits Warburg with spearheading the development of the hugely important Eurobond market during the middle of the twentieth century (although the importance of his role here is often contested by others). Warburg is also notable for pushing through the UK's first hostile takeover bid - that of British Aluminium in the mid 1950s - a role that also highlights the somewhat Machiavellian streak in his nature. However, what stands out most about Warburg the banker is his differences to rather than his similarities with modern bankers: long-term over short-term gains, clients' profits before the company's. His attitude to life was shaped by his mother who believed that "happiness in life consists in fulfilment of duties and not of desires". (It should be noted however that Warburg, ever the ladies' man, couldn't help but let his 'desires' get the better of him from time to time.)

Warburg certainly was an interesting character and an influential banker in his time, but the subject of this biography is not the main reason why it should be read. Its main attraction is as a piece of economic history, wonderfully written by one of this country's most respected historians. Warburg's career spanned a time of great change and upheaval, and this man was able to come out on top without having to compromise his honour or his conscience. Warburg did not live to see his creation gobbled up by the big foreign investment banks during the 'big bang' of the late 1980s which destroyed the cosy little world of the British merchant banks. That world - Warburg's world - is now long gone. But perhaps now is the time to look back and ask the question: what went wrong? Warburg would have known the answer.

High Financier: The Lives and Time of Siegmund Warburg by Niall Ferguson can be purchased for GBP 30 by clicking here.

Visit www.SquareMileBookstore.com for the ultimate range of investment, trading and business books, personally selected by investment experts, with exclusive free reviews from some of the UK's foremost investment writers.