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Morning Coffee: Female banker of fearsome reputation makes surprise move in London. Prime brokers fomenting the next financial crisis

Debbie Crosbie isn't a 'banker' in the M&A sense, but she does run a bank, and she is doing the kind of deal that will make the actual Financial Institutions Group (FIG) bankers at UBS who are working with her feel vindicated in their career choices. 

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Crosbie is the 53-year-old chief executive of Nationwide, a British building society, with mutual roots that yesterday announced its intention of acquiring Virgin Money for £2.9bn, a move that will a) net the UBS bankers healthy fees and b) allow Nationwide to move into business banking. 

It's the largest deal 'ever made by a female banker' and will create an entity with £366bn in assets that will also be the second-largest provider of mortgages and savings in the UK. For Crosbie, the Glaswegian daughter of a care worker and engineer who's described variously as "ambitious", "bold", "hard-nosed," "tough", "articulate" and a "first-class operator", it confirms that she is all those things.  She and Citi CEO Jane Fraser, who is also Scottish, but comes from more aristocratic lineage, may want to hang out. 

Crosbie's move is said to be making Nationwide's 18,000 staff anxious ahead of the merger. However, she has long indicated a willingness to challenge staff sensibilities. In her previous job at TSB Bank, Crosbie cut the operating team from 15 to 10 and did away with a central committee. Last December, she eliminated Nationwide's work from home policy and demanded that everyone appear in the office two days a week from January.  Her (male) predecessor had said people wouldn't be forced back to their desks. Women in banking have a new role model. 

Separately, just as banks decide that prime broking is the place to be, Alphaville notes that the Bank for International Settlements has apprehended that there might be some risks involved.

Given that prime brokers provide margin loans to hedge funds which invest in often opaque assets of uncertain valuation that suffer in "adverse market conditions," the BIS notes that prime brokers are a source of 'wrong way risk' (WWR). WWR occurs when exposure to a counterparty increases at precisely the moment that the counterparty looks like it might default. It is not to be desired. 

Alphaville says the BIS has not made these observations before. Prime brokers are a definite "contagion nexus." Just ask Credit Suisse and Archegos. Or cast your mind back to LTCM. Regulatory demands for increased capital may yet disrupt the prime party.


A woman has accused Crispin Odey of rape in a civil court filing. Odey's lawyers said that “to date [Odey] has not received any documents related to” the woman who is alleging rape, save for a letter of claim. (Financial Times) 

Three more women asked to join the Odey lawsuit. One claims that after a business lunch Odey drove to his home under the pretext of fetching something. Once they were inside his home, she said Odey went to another room and then reappeared in a dressing gown before raping her. Odey has strenuously denied the claims in the past. All the women must file separate claims. (Bloomberg) 

On the trading floor: “I’ve been asked by clients if I like spanking." (Financial News) 

Brevan Howard now runs $10bn from Abu Dhabi, which is just under a third of its total assets and more than it manages from London or New York. (Bloomberg) 

Morgan Stanley thinks global deal-making volumes will rise by 50% this year compared to 2023 as fears over funding costs, inflation and recession concerns abate. (Reuters) 

Cantor Fitzgerald hired nine senior bankers to focus on the technology sector. (Financial News) 

Goldman Sachs appointed five new leaders in its European financing group, including Laura van Alkemade, who's becoming head of EMEA structured finance. (Financial News) 

Five out of the seven top European investment banks booked revenue growth in their M&A and capital markets business last year, while all five major US banks reported revenue declines. (S&P) 

Steven Mnuchin stands to make money (again) from a banking crisis after leading a deal pump more than $1bn into New York Community Bancorp. (Financial Times)  

Technology jobs are trending downward but new AI job listings are up 42% compared with a December 2022 low point. (WSJ) 

The European Union has accidentally allowed unlimited trading in dark pools for 18 months. (Financial Times) 

Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email Signal also available.

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AUTHORSarah Butcher Global Editor

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