So much for Anglo-Saxon transparency

Or at least as far as Lloyds of London are concerned.

Since the Asian crisis you have all read a lot about how transparent the Anglo-Saxon capitalist culture is. The more discerning realised this was never entirely true, but I am sad to say I discovered a great gaping whole in the edifice yesterday.

A friend had called me up and said he had heard that a few Hong Kong tycoons were 'Names' at Lloyds of London and would therefore be taking a hit from the disaster at the World Trade Centre.

'Names' are members of the syndicates that underwrite catastrophe risks. As has been well-reported, the terrorist attack on New York will be the biggest hit the Names have ever taken.

Duly, I called Lloyds of London's communications department and asked if I could get a list of the Names in the syndicates. Expecting this to be a straightforward request - a bit like asking for the board of directors of a listed company - I was a little taken aback by the reply that, no this was not possible, as the list is private.

Even worse was the justification for this. A 'Name' was making a private investment, I was told, and as such I had no more right to know about it than the spokesperson at Lloyds had to know about the contents of my bank account. As he delivered this line, I had the heavy feeling that this was not the first time he had said it.

However, it is a totally disingenuous excuse. My bank account is private because it doesn't affect anyone but the bank and myself.

The Lloyds Names on the other hand, are guarantors of a major plank of the global financial system. They are financially responsible individuals, and as such their identities - it would strike any logical person - ought to be a matter of public record.

After thinking about this for a while, I called up the communications department again, and was told that I was right in thinking that the Names have unlimited liability. However, the syndicates (which the Names join) are the ones that have to guarantee that the Names have sufficient funds.

As things stand there are 2800 names who make up 20% of Lloyds capital, meaning these individuals have injected a combined $3 billion. However, if catastrophe strikes and these monies are not enough, the Names have to put in more and more, up to the point at which (if necessary) they lose their companies, houses etc.

Given the potential downside, it would be of interest to many people who have financial dealings with Names to know that the individuals concerned have signed up for this onerous task.

However, there is no transparency so this is not possible. You might as well try and find out whether someone is a member of the mafia. It might even be easier.

So next time you hear someone complain about transparency in Asian countries, remember that in one of the great heartlands of capitalism - London - there is a highly untransparent plank in the global financial system that seemingly has no intention of changing. Maybe the IMF should step in.

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