, Columnist
Bank Relationships and Index Rules
Also Bancor, leaky brokers, Martin Shkreli, slot machines and unicorns.
Relationships.
The basic business of banking is relationships, and a basic fact about relationships is that they are imprecise things. You do not give a company a loan, or buy its chief executive officer a steak dinner, in exchange for a merger mandate. You give the company a loan, and you buy the chief executive a steak dinner, to build a sense of loyalty. Then, later, the company gives you a merger mandate, out of loyalty. The difference is in how you feel about it: Ideally -- and this ideal is not always achieved -- but ideally you both feel like you have a mutual relationship of trust and support, rather than a cold soulless accounting of inflows and outflows. You do not account for your friendship.