It was Tony Montana who used to evangelise, amongst many other unprintable things, that money equals power. While the fictional Cuban drug lord was on the mark most of the time, on this topic he was only half right.
Because it’s not just money that equals power, it’s the power over other people’s money that gives an individual real influence. And if you take a look at our list of Top 10 Money Movers, you’ll find some of the most powerful people in the country.
You may not have heard of some of them. You may feel all-too-familiar with the rest. But whether they’re controlling interest rates or creating new corporate giants, they all have a big say over what gets done with other people’s money. And they decide who gets richer and who gets poorer.
What can money movers do?
- Slow down or boost the economy by changing the price of credit.
- Carry out enormous public spending measures.
- Implement new taxes to swell government coffers (or simply go into debt and pay for things later).
- Jack up interest rates to improve the balance sheet.
- Swallow smaller financial rivals in hard times (and become more powerful in the process).
- Operate in cartel-like behaviour to maintain the banking system status quo.
- Use financial and political clout to change, champion or quash government regulations.
- Wheel and deal to create new corporate giants or sell off old ones.
- Become more profitable (and powerful) by introducing new fees. Or entice new customers by slashing old fees (then out them back up again).
- Have a say over the direction of Australia’s $1.3 trillion superannuation pool.
- Get rewarded with astronomical pay cheques.
What gives them their power?
- Mortgages. Australia has around 2.5 million mortgage holders: if you can control how much they pay, you’ve got enormous influence.
- Financial clout. Whether you’re a big four CEO, investment bank supremo or federal government treasurer, the bigger your pile, the more power you have.
- Runs on the board. You need to have proven yourself within the industry, in some way or another, to get anywhere near the big chair.
- Public perception. Bankers are some of the most disliked people in society — if you can show you’re different to the rest, you can become more powerful.
- Contacts. Networks are the way power amplifies itself. If your phone calls are getting returned by CEOs and directors, you know you’ve got influence.
- League tables. In the world of investment banking, power is often found in the size of the fee won from advising on a deal.
- Intelligence. While they don’t all take the traditional MBA route to the top, our big bankers are often the smartest person in the room.
- Gender. Finance is a blokey world and you don’t see too many women smashing the glass ceiling. There are exceptions of course, but not often.
The power of position?
Unlike some of our other lists, power in money is not necessarily found in the people themselves but rather from their position in charge of an enormous financial institution. This can mean swift changes in those who are powerful and those who are not. If the CEO of a large bank gets knifed tomorrow, he or she will very quickly find their way out of the Top 10.
Bow down to the four pillars?
With a combined home loan book of more than $500 billion and a market capitalisation of $261 billion, the Commonwealth Bank, Westpac, NAB and ANZ make up the so-called “Big Four” of Australia’s banks. And they’re only getting more powerful; the two most recent banks to be described as the “fifth pillar” were bought out by one of the Big Four. So if you happen to be running one of them, you’re amongst the most powerful people in the country.
The effect of the GFC?
The US subprime mess crippled many financial institutions and saw a string of international banks go under — but it may have made our big banks more powerful. While the majors did not escape the crisis completely unscathed, they came our a lot better off than their European and US counterparts.
The Reserve Bank and federal government also came out with their reputations in tact for steering the economy through the crisis. Meanwhile, those who kept operating in the investment banking sphere also won many friends.
Shareholder return?
Most of the Top 10 Money Movers — those who are in charge of or near the top of some of the market’s biggest listed companies — are beholden to their companies’ share price. Underperform in the market and your board will quickly make you aware of it; you might even find yourself on the way out.
The financial sector has dived 48% since its pre-GFC heights. Find growth in the current environment and your grip on power can become unshakeable.
Domestic market or Asia?
All CEOs have a strategy: it’s what defines them and their legacy. So which of these are the most apparent in money at the moment?
At the ANZ, Mike Smith is making waves with his push to make his bank a “super regional” institution by providing services to Asia. He wants 30% of ANZ’s earnings to come from Asia by 2017. Meanwhile, NAB CEO Cameron Clyne is fighting to win more market share domestically, by embarking on an ambitious discounting and advertising strategy aimed at retail customers.
The power of a deal?
The investment banking rainmakers who made the Top 10 are some of the most well-connected people in the country. They are also some of the most powerful, with the ability to pave the way for corporate mergers or the selling off of an Australian corporate icon. They are the ones who have the ear of CEOs and of boards; if you want something bought or sold you go to them.
And the coutdown begins, at #10 … Christian Johnston
You might not know his name, but trust us: Christian Johnston is one well-connected individual.
When a CEO, board or government wants to wheel and deal, they go to “CJ”. The Goldman Sachs head of investment banking is one of the top corporate deal makers going around.
Not that you’d really know about his influence: the seemingly-invisible Johnston rarely leaves any fingerprints outside the business world. But inside the marble walls of high finance, it’s often the baby-faced Johnston tugging at the strings of power.
“CJ’s power comes from his relationships with blue-chip corporates,” says one observer. “He has access to the most influential directors and CEOs, and influence over some of the biggest decisions they will have to make.”
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