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Book review: Exile on Wall Street

A former analyst for Lehman Bros. and Deutsche Bank sounds off on the banking industry.

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Photo: Anna Lisa Sang

EXILE ON WALL STREET: One Analyst’s Fight to Save the Big Banks from Themselves
(Wiley)
Mike Mayo

If the Greek philosopher and cynic Diogenes had wandered down modern-day Wall Street with his lantern in search of a single honest man, he’d surely have found Mike Mayo hopping up and down and waving for his attention. A former analyst for the likes of Lehman Bros. and Deutsche Bank, and now Credit Agricole Securities’ managing director, Mayo has for a decade positioned himself as the Street’s conscience, testifying before Congress on finance industry conflicts of interest and the causes of the financial crisis. His critiques of his sector have cost him jobs—Credit Suisse fired him for putting a Sell on the entire banking industry—and this book collects the best of his war stories and observations from a career as banking’s black sheep.

It’s not just a backward-looking exercise, however. Mayo’s convinced that the banks are still fundamentally flawed. No fan of increased regulation, he thinks a purer capitalism would result from their being “let off the leash”—but subjected to greater transparency with better accounting standards, and with bank insiders reined in and boards and analysts re-empowered. “And we should hold banks accountable when they drop the ball,” Mayo argues. That means not considering any financial institution too big to fail.