It’s your first day at work. Your clothes are starchy new. Your shoes are stiff and pinch your feet. You don’t know what you’re doing or where you’re going. Everyone else seems to be so much more knowledgeable and confident. Everyone must be looking at you.

There goes that City new bug, they must be thinking.

Whatever you do or say, you don’t want to look an idiot.

You don’t want to torpedo your career – which stretches ahead of you, the weeks, the months, the years – on day one.

Relax. Read this book.

If this is you – and, don’t worry, we’ve all been there – this book tells you what you need to know about the City, and gives you the confidence to ask questions to find out more.

Maybe that isn’t you.

Maybe you’re walking round the City’s dark alleyways. You pause, look through an office window and see people at monitors. What are they doing?

This book tells you.

Maybe you’re at Canary Wharf, craning your neck to peer up at the tall towers. What kind of businesses need that much space?

The answers are in the next few pages.

Maybe you’re at a dinner party and the attractive person next to you says they’re ‘an investment banker’ or ‘a fixed-income trader’ or – even worse – ‘a forex trader who does cable’. What can you say that will impress the pants off them?

Read this book. It could change your love life.

Maybe you’re an armchair investor, scanning the personal finance pages of the Sunday papers. You find they’re written in gobbledygook.

This book cracks the code.

Maybe you’re studying. You need to know about the City for your assessment. Maybe you’re wondering what your studies will lead to. Maybe the City.

Read this book. Sorted.

Above all, if you’re working in, or are thinking of working in, or are thinking of having anything to do with, the City, and feel overawed and stupid because you don’t understand it, then this is the book for you.

Who this book is for?

This book is aimed principally at young, front-line, fee-earning professionals in the City – bankers, brokers, fund managers, lawyers, accountants, insurance brokers, surveyors, actuaries, patent attorneys, PRs, recruiters and headhunters, among others, starting out on their careers.

But it’s also for support staff such as secretaries, PAs and business managers as well as people in mid-office and back-office functions such as Accounts, HR, IT, Business Development, PR, compliance, settlement and custody – in other words, professionals who are specialists in their own jobs but need to understand what the fee-earners do in order to support them in their roles. That’s because for City institutions to compete these days, all of their people need to understand the business.

But this book is designed to be simple. So it’s also for students at school, college or university who are thinking of working in the City or need to understand it for their studies. This book isn’t restricted to the young and inexperienced, either. The course on which it’s based has been delivered by me to a roomful of regulators. Nor just to those in the City. Many people based outside London need to know what goes on in the City because it affects their work or their clients or their pensions and savings.

Health warning

A word of warning. I’ve tried to make this book short, simple and easy to understand, so that you read through to the end and get the whole picture.

To do that, I’ve had to leave out a lot of stuff and to cut corners. Not the important stuff, though. Just the boring minutiae. Don’t worry: what’s in here is all I’ve ever needed to know in 25 years of working in and around the City.

If you know nothing, it’s better to be roughly right than precisely wrong. This book helps you be roughly right.

Once you’ve got the basic framework from this book, you can fill it in by reading any of the others listed in the bibliography at the back, and by dipping into the Financial Times and The Economist from time to time – but only if you want to.

Regulation

For example, one area I have deliberately omitted is regulation. In books that do cover it, it is the kiss of death: it is highly technical and, frankly, as boring as it is necessary.

Some books actually start out by telling you the City’s regulatory structure. I don’t get beyond the second page, because it doesn’t tell me what people in the City actually do.

All you need to know about regulation is that it has two purposes: (1) to stop institutions (i.e. financial businesses) in the City from harming themselves (going bust from taking on too much risk); and (2) to stop them from harming others (defrauding others by manipulating the market or insider dealing or plain theft – all of which goes on: where there’s money there’s criminality).

In the City this is now done entirely by the FSA (Financial Services Authority). If the alleged activity is criminal, the police and the Serious Fraud Office (SFO) will probably investigate too.

If you need to know more it’s because you are either a regulator or work in the compliance function of an institution that is regulated. In which case, ask a colleague.

Ask questions

I have learnt what I know by asking lots of immensely clever people loads of stupid questions about the financial markets. It’s called financial journalism. What I’ve learnt I’ve stuck in this book so that you don’t have to.

But what I want this book to do is to give you the confidence to ask questions: too many people pretend to know when they don’t because they think they will look stupid.

Armed with the knowledge this book will give you, you will be able to ask questions in the confidence that they are not stupid.

And what I have also discovered is: the simpler the question, the harder it is to answer; and if you don’t understand the answer it’s because the person telling you doesn’t know either. Good luck!

Acknowledgements

I used to be a lawyer and I’ve asked a number of them to look through these pages. You know who you are, you pedantic nit-pickers! And I know you don’t want to be mentioned in case you get sued!

I’m particularly grateful to my old friend and colleague, Andrew Freeman, a stalwart of The Economist, who has been, amongst other things, its Wall Street Editor and European Business Editor, and who knows more about the workings of finance and business than anyone else I know.

To all of you, many thanks. Any remaining mistakes are mine alone.

Christopher Stoakes

May 2005