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A Conversation with Jonathan Knee: Author of The Accidental Investment Banker

OUP Staff:

How did you come to write this book?

Jonathan Knee:Knee_2

Over the years as an investment banker and a business school teacher, two related phenomena have always struck me. First, how little the general public understands what investment bankers actually do. Even other professionals and clients who deal with investment bankers often find the bankers’ role somewhat mysterious – although they are usually too embarrassed to ask questions about it. Second, how little investment bankers themselves understand about the historical context of the role that they do play. Given how quickly the industry has changed in recent years and the accelerating rate of employee turnover, there are fewer and fewer repositories of industry or institutional memory. I wanted to find a way to tell the story of investment banking that had some impact on both of these phenomena.

OUP Staff:

Your book has been compared to “The Devil Wears Prada” describing it as a tell-all of Wall Street. Do you agree?

JK:

I struggled with how I could make the story I wanted to tell engaging and meaningful to a general audience, and concluded that I could not do so effectively without including real people and situations. But I offered this aspect of the book merely as a narrative device. So the narrow answer is that it is not a tell “all” in the sense that I tried very hard to include such material only where necessary to make more tangible the broader themes of the book. I am a first-time author and I don’t pretend to have gotten the balance completely right. As I say in the acknowledgements I take full responsibility for what I have wrought.

OUP Staff:

Unlike other books of this genre, you are still working in the industry you dissect. How does this make your book different?

JK:

Hopefully, my ongoing involvement in the industry gives the narrative both more texture and more credibility. Frankly, I think it would have been impossible for someone not in the industry to write this book.

OUP Staff:

But if investment banking has become so bad, why are you still doing it?

JK:

I dedicated the book in part to my godson who thinks he wants to become an investment banker. My goal though is not to dissuade him. I just want to make sure he does it for the right reasons and knows what he is getting into. Investment banking can still be one of the great jobs of all time, and there are many great bankers who continue to perform that role admirably. But there are a number of structural obstacles to being a trusted advisor to a CEO, that did not exist when Sidney Weinberg – the historical figure who is the hero of my book – practiced his craft. If my book serves as a catalyst to a more open dialogue with our clients and ourselves about what these obstacles are, I will feel that my book has made an important contribution.

OUP Staff:

Even so, this is not just a history of investment banking. You are highly critical of a variety of changes in the industry. Where do you think it has fallen short?

JK:Knee_credit___1

There is always tension between the relationship model, in which core client relationships are paramount, and the transactional model, in which maximizing short-term profit from transactions is paramount. For many years, the industry did a pretty good job of balancing these tensions even as the pendulum swung inexorably towards the transactional side. The Internet boom was the tipping point, however. And the industry missed an important opportunity to aggressively redress these excesses when the bust came in the beginning of the new century. The result has been an understandable diminution of trust and loyalty among clients and employees. I think the industry is still in the midst of an identity crisis.

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