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New face of global finance says no more parties in castles

Source : REUTERS
Last Updated: Fri, Jun 21, 2013 14:20 hrs

By Laura Noonan

LONDON (Reuters) - The new face of the world's finance industry says he gets it. When the whole world seems to be united in fury about your industry's lavish pay and perks, it is probably a bad time to rent out a giant Danish castle for your annual party.

"No more castles," Tim Adams, the new head of the Institute of International Finance, told Reuters. "I'm not a castle guy."

A year ago protesters were thronging the steamy streets of Athens while the IIF's top brass, who had negotiated a deal on behalf of private investors in Greek debt, held a bankers' bash in Copenhagen's Elsinore castle, home of Shakespeare's Hamlet.

Tim Adams, 51, who took over the helm of the group after his predecessor Charles Dallara dominated it for 20 years, says he plans to set a very different tone when more than a thousand of its members gather in Paris next week.

Starting with his own pay. Dallara earned nearly $4 million a year. Adams says he will be paid "substantially" less.

"If we do well then I'll do well, if we don't I won't. I'll be the first in line to give up whatever financial resources I've been offered, and I've told the staff that."

He won't disclose his terms now, but said his pay will be in the IIF's annual tax disclosures, along with other details of how it spends its $33 million 2013 budget.

He will also ask his board to bring in rules capping the term of chief executives, starting with himself: "If I were here less than six (years) I'd be disappointed," he said. "And if I were here more than 10, I should be shown the door."

CONFRONTATION

At a time when politicians and central banks were imposing new rules to prevent a repeat of the financial crisis, Dallara was known for taking a confrontational line with authorities.

Under Dallara, the IIF warned that new capital rules for banks known as Basel III would lead to a 3.6 percent increase in the cost of their customers' borrowing, a warning that critics called alarmist, and which ultimately proved inaccurate.

Adams, who like his predecessor is a former senior U.S. Treasury official, said member banks had told him they want the IIF still to take a tough line on regulation, but also to be collaborative with the authorities.

"The official community are absolutely overwhelmed," Adams said. "If we can find ways to bring the industry view to help them do what they do in the most optimal and efficient fashion then we should."

The U.S. Treasury and the Federal Reserve recently asked the IIF to help with developing policies on cross-border resolution - how to make sure global banks can be allowed to fail without being bailed out by governments - by "convening the smartest people we know and helping them think through what is an incredibly challenging issue", he said.

In Europe, the IIF is working with consultants Bain on research exploring ways to improve small and medium companies' access to funding and will deliver results its October.

Adams describes regulation as "front and centre" of the IIF's work, stressing the unique status and access the organisation brings to bear as the only global voice for the financial industry.

He praised what he described as the "unique" Greek debt deal, which saw Dallara negotiate on behalf of banks that agreed to wipe out a nominal 100 billion euros in loans to Greece. But he suggested he would avoid becoming a prominent public figure as his successor did during the talks.

"The Greek workout raised the IIF's profile. No matter where I go, people will remember the very visible nature that this institute took during that workout," he said.

"I think it was quite positive. I wouldn't be on the front pages of the paper...It's not my style."

"ALL THE MICE DIED"

Insiders say the Washington-based IIF has gone through something of an existential crisis since the February departure of Dallara, who led it for two-thirds of its existence.

Dallara is due to give the closing address at next week's event in his new role as an executive with private investment manager Partners Group AG. He declined to comment for this article.

The changing of the guard after so many years "lends itself to an opportunity to refocus a bit," says Adams.

Among future changes, he is considering opening offices in new global financial centres to reflect his changing membership. The Middle East and Africa now account for 22 percent of member banks against 14 percent in 2002, while Europe's share has dropped from 36 percent to 31 percent.

A source said some Western banks have withdrawn from the IIF recently, including Bank of America and Spain's Bankia . Adams said about 50 new institutions joined last year and another 25 so far in 2013.

Meanwhile, he travels the world, seeking the views of the financial institutions he represents. During his first five months in the job he flew 200,000 miles. It's a tough schedule.

When Adams took the job, his wife put up on their refrigerator a report of a study on the impact of simulated jet lag on mice.

"All the mice died," he said.

(Additional reporting by Steve Slater in London and Sarah White in Madrid; Editing by Alexander Smith and Peter Graff)



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