Europe's most powerful banker: Who is Colm Kelleher?

There was a prominent figure in the group at the press conference attended by Swiss politicians, regulators, and financiers. He's someone who, in his bright blue shirt, green tie, and frown for an hour and a half, shows more emotions than the rest of the five speakers put together.

The subject of this press conference in March was the fate of Zurich-based Credit Suisse. The bank's situation in crisis was threatening the European financial system. At the meeting, it was announced that the 167-year-old bank would be rescued by its biggest rival, UBS. It is not unusual for Colm Kelleher, chairman of UBS, to be unable to sit still. Thus, he was declared to be the most powerful banker in Europe.

Kelleher has long been seen as an outsider in the banking world. He can be a joker sometimes. Sometimes he is disciplined: he is known to not let in colleagues who are late to meetings.

Kelleher, 66, has followed closely the series of shocks the global financial system has faced since the 1930s. It even took Morgan Stanley, of which he was CFO, off the brink in 2008. But before UBS bailed out Credit Suisse, he was mostly in supporting roles.

Kelleher comes from a noisy and crowded family. At Oriel College, Oxford, he abandoned the "simple" board games he played with his sister and became obsessed with the strategy game "Diplomacy". At first, he became an academician and decided to study Byzantine history. But his father didn't have the money to make him study for so long. He entered the business world and started an accounting internship at Arthur Andersen.

He was hired by Bob Diamond at Morgan Stanley's London branch in 1989. John Mack, head of fixed income at Morgan Stanley at the time, said: “He was very serious and concentrated. He would immediately smell the lie.”

Morgan Stanley crisis

Kelleher's real breakthrough came with a crisis in 1992. Diamond, who had hired him, had left the bank to work at Credit Suisse and had colluded to take with him a dozen colleagues from London, New York, and Tokyo. They all resigned at the same time.

The job of removing the wreck was entrusted to Kelleher and an American manager named Tom Wipf. According to Wipf, “Kelleher knew how to set up headquarters.” He also showed skill in convincing panicked customers that the bank would honor its commitments.

He became CFO of Morgan Stanley in 2007. He now had two sons and a daughter studying in London, a new flat in New York, and a big job.

Fast food days

In those days, the subprime mortgage crisis, which is called sub-threshold, broke out in the US economy. A few months later, Morgan Stanley's subprime trade was $3.7 billion in. Kelleher had a difficult task: For the first time in the bank's 72-year history, the loss would be disclosed. Paul C Wirth, then Morgan Stanley financial controller, recalls that, unlike other executives, Kelleher was able to ask detailed and probing questions. Thus, they prevented the collapse from becoming more serious.

Located on the third floor of the bank's Manhattan headquarters, the 3F conference room has been transformed into a "cash room." Kelleher set up a team here to track the amount going in and out of the bank. The staff was working 18 hours a day. Uneasy with the amount of fast food consumed at 3F for a while, the CEO of the time Mack limited orders to tuna fish sandwiches and salads.

“Moody donkey”

One evening in September 2008, as Lehman Brothers was still reeling from collapse, Kelleher heard from the team at 3F: Venture fund clients had withdrawn more than $50 billion in a single day. He went to Mack's office and told his boss, "We're going to be broke as of Friday."

But he tried very hard and managed to hold on. Mack also nicknamed Kelleher Iyor, after the moody donkey from the Winnie The Pooh cartoon, has even sent twenty Iyor toys and figures as gifts over the years.

When Kelleher was on his own, he couldn't keep his guard from falling. Sometimes he would attack the small screen of his BlackBerry to forget the bad news, breaking record after record in BrickBreaker. He often slept on the couch in the office, gaining 14 kilos in a few months. As a result, Mack and Kelleher landed a $9 billion capital injection from Japanese bank MUFG, and Morgan Stanley survived.

He didn't give up when he couldn't be the CEO

By 2009, Mack was due to retire and had two potential successors: Kelleher and James Gorman of Australia, who was in charge of Morgan Stanley's wealth management. When Gorman was given the job, Kelleher realized he would never make it to the CEO of Morgan Stanley, which he had pursued for more than a decade. But he didn't leave the company and worked with Gorman for the next ten years.

Kelleher, who turned 62 in 2019, decided to leave. His intention was to travel to his native Ireland, but the Kelleher family spent most of the Covid-19 shutdowns in a scenic villa in Tuscany. His days usually began with an hour of exercise before breakfast, followed by two hours of piano study, and in the afternoons he was sifting through Edward Gibbon's eight-volume History of the Decline and Fall of the Roman Empire.

While not working, he went on a pilgrimage with one of his brothers. They walked 800 kilometers on the Camino de Santiago de Compostela in northern Spain. Kelleher managed to raise $330,000 for charity thanks to the walk. Not liking the local wines on offer, Kelleher made do with the distilled Jim Beam in his flask. But he had unfinished business in the banking realm.