It was more complicated of course-my restlessness, my doubts about us. But I felt a tremendous relief to tell someone this simple, shameful fact at last. The wind howled around us, and Anna said nothing for a while.
‘She was a first-year student of Marcus’s.’
I thought I’d misheard. ‘What?’
She repeated it, and I said, ‘You knew? I didn’t think anyone knew. How …?’
‘Marcus told us.’
‘Us?’
‘Well, Damien certainly, probably Curtis and Owen.’
‘My God … And Luce?’
‘I don’t know. I didn’t say anything. She never mentioned it.’
I was astounded. ‘How did Marcus know? He wasn’t even there.’
‘He arranged it, Josh. He never forgave you for having Luce fall in love with you. He got the girl to do it.’
I think if I hadn’t been tied in I’d have slipped off the rock at that point. I thought of everything that had flowed from that betrayal, leading ultimately to Luce’s death. If I hadn’t left so abruptly, if I’d waited till the end of the academic year, say, and come to Lord Howe with Luce, and climbed with her on that fateful day …
As if she was listening to my thoughts, she said, ‘I had the impression that Marcus wanted to get rid of you. That he didn’t want you coming here with Luce.’
‘I feel terrible, Anna. So ashamed.’
‘That’s why we’re here, isn’t it?’ She put a cold hand around mine and squeezed it tight.
‘Me, maybe. But you’ve got nothing to be ashamed of.’
‘Haven’t I?’ She hesitated.
‘Of course not. You were always her truest friend.’
‘Maybe not. She was very upset after you left for London, and finally came to tell me that she’d decided to withdraw from the course and take a year’s leave of absence, to go over to be with you. I persuaded her not to.’
‘Oh …’ I wiped water out of my eyes. ‘Well, that was sensible advice. She was so close to finishing her degree.’
‘No, it wasn’t that. I was jealous of you two. I was just the same as Marcus. I wanted to climb with her over here. I was being very selfish, and because of that she died.’
‘But you didn’t come.’
‘No. I met someone-a man.’ Another surprise. It wasn’t that Anna wasn’t attractive, but she had always seemed rather diffident around men, and her occasional dates and encounters never seemed to come to anything. ‘He wanted me to stay with him. It would have been difficult anyway coming over here so close to my end-of-year exams. I thought he was wonderful. When Luce and the others came over here I moved in with him and I felt I’d never been so happy. Then we got the terrible news. He helped me a lot, getting through the first shock-but I was inconsolable. I couldn’t think about anything else, and with the inquest and everything … I was obsessive, I suppose, pretty impossible to be around. Anyway, one day he told me that when we met he’d just split up with this other girl, and now he was going back to her. I didn’t eat for a week, and then one day I was standing at a bus stop, and I saw this truck coming and I just walked out in front of it. It wasn’t a big decision or anything-I just did it. The poor driver … He almost managed to stop, but I was sent flying. I spent five weeks in hospital getting patched up, then two months as an in-patient in a private psychiatric clinic in Waverley.’
‘Oh, Anna …’ I put my arm around her shoulder and pulled her close.
A blast of cold wet air, more vicious than the rest, slapped us so hard it sucked our breath away. ‘Oh!’ Anna gasped, gripping me tight. ‘This is terrible.’
‘Yeah, marginally worse than working at the Walter Murchison Memorial Nursing Home, I should imagine.’
She dug me in the ribs with her free hand, then said, ‘So, go on then, tell me about your bank.’
‘It’s very boring. You wouldn’t be interested.’
‘Try me. I think we’ve got all day.’
So I began to tell her about credit derivatives and risk management. It seemed quite surreal in such a setting, and as I spoke I found it hard to believe that I had once found that stuff incredibly interesting. It was all so remote now, so utterly devoid of real meaning. Yet in the city, where the real world rarely set foot any more, it had seemed close to the vital essence, the purpose of life. It was sexy. I was doing what every young man wants, to be involved in something clever and important that hardly anyone knows about.
It became sexy, as I said before, after the Barings Bank and other disasters.
In the post-Barings wisdom, the essential principles of risk management require a separation of powers within an organisation between the front-of-house traders and dealers, who are greedy for contracts and commissions, and senior management, with its more sober perspective on risk. Between these two groups should sit the RMU, the Risk Management Unit, assessing the dangers of promised deals and ensuring that the policies of the board are implemented on the shop floor. No longer would it be possible for a rogue trader to approve his own deals, as Nick Leeson had at Barings, getting deeper and deeper into trouble without senior management having a clue what was going on.
That was the theory, but of course policies and strategies, no matter how rational, depend upon inadequate human beings like ourselves to carry them out. We have our weaknesses. We have an undue respect for people with grand reputations, especially if they appoint us to much-sought-after positions; we develop an attachment, then a dependence, on the absurdly generous rewards they offer us; and we feel proud loyalties which cloud our view of those outside our circle, who increasingly appear stupid and obtuse.
We didn’t gamble recklessly on the Nikkei like Leeson at Barings, nor drown in commodity options like Hamanaka at Sumitomo. Our failure was more innocent, I liked to think, like sewing machine legs, or tidal waves, just one of those things that happen. Imagine a chemical engineering company in the north of England-let’s call it Sunderland Petchem-with a track record of supplying equipment to the North Sea oil fields. They have done business with BBK Bank before, and are regarded as a soundly managed small company. But now contracts in the North Sea are on the decline, and they have been forced to look further afield, to the booming oil business in Venezuela. There they have possibly secured a major contract, subject to final details. This project is much larger than any they have previously undertaken, and would require a major injection of capital for expansion. BBK’s loans staff are highly enthusiastic, having reached agreement on lending rates which would be extremely rewarding for the bank, not to mention the bonuses of the negotiating staff. However, the RMU is worried; Sunderland is inexperienced in this part of the world, and with this size of project our analysis rates the risks as rather high. Our boss, Lionel Stamp, calls a team meeting to discuss what we should do.
Lionel was an impressive fellow. In his mid-thirties, energetic, imaginative, with a startling memory, his reputation was outstanding. When I first met him I was most struck by his floppy hair and languid English accent, which I thought rather ludicrous, but I soon got over that when I realised how sharp he was. Now he hadn’t got to lead the central RMU of an organisation like BBK by being negative and obstructive. On the contrary, his mentor, Sir George Henderson, had picked him because he could not only sniff out possible problems, but also provide ingenious remedies. In the case of Sunderland, the problem basically was to reduce the levels of risk to BBK if something went wrong with the Venezuela contract. The straightforward way to do this would be to sell on part of our Sunderland loan to other lenders in the secondary loan market, or to investors in the asset-backed securities market. Either way, BBK would reduce its exposure on the deal to a more acceptable level. The trouble with this approach was that we would be legally obliged to tell Sunderland what we were doing, and obtain their agreement. In effect we would be telling them that we didn’t have complete confidence in them, upsetting not only our client, but also perhaps the whole Venezuela deal if word got out.