FinanceAsia removed this story from the website the day it ran -- on April 1, 2005 -- as too many people took it seriously. As a result, when we set out to find it in our databank, sadly it was gone. So we asked former FinanceAsia editor Steve Irvine, the author, if he still had a copy.
"Turns out I did still have it," wrote Irvine in an email. "You can say at the outset in capital letters that this was an April Fool's joke written by me while in Seoul. Unbelievably, a lot of people believed it, including heads of legal and compliance at various banks!"
So here goes: THIS IS AN APRIL FOOL'S JOKE.
Read it, and ask yourself: Wouldn't you have sussed that out?
In a move that has rocked the Korean investment banking industry, the Financial Services Board (FSB) announced yesterday that it would place onerous new restrictions on client entertainment -- by limiting alcohol consumption.
The move came on the heels of a new report that reckoned 68% of bankers in Korea were still partially inebriated between the hours of 8am and 11am. The report suggested that Korea's financial services industry was only 82% as productive in the morning hours as in the afternoon.
"This loss of productivity cannot be tolerated any longer," said a source at the Financial Services Board, which regulates the industry.
The FSB yesterday sent out a circular to the heads of all major investment banks in Korea outlining new regulations designed to rectify the situation. Shocked investment bankers say the regulations will seriously impact their ability to entertain clients.
Foremost among the regulations is an alcohol restriction that will limit bankers and their clients to 10 units of alcohol per night. "That's clearly not workable," said one local banker on the condition of anonymity. "That's only three glasses of wine, a double whisky and a beer. The evening will be over by 10pm."
Moreover, the regulations specify that no member of the financial services community will be allowed to drink what the Koreans call 'bombs'. A 'bomb' is a shot of whisky poured into a glass of beer and downed in one.
"Bombs are particularly dangerous," said the FSB official. "They are normally drank in karaoke bars and seem like a good idea at the time, but before you know it you have drank four, it is 3am and you can't even pronounce your own name."
The FSB plans to police the new regulation vigorously. It says it will put breathalyser machines in the reception areas of all the major financial institutions, and carry out random tests. Anyone over the 10 unit limit will receive an on-the-spot fine of W300,000 ($245).
The FSB official adds, "Any banker caught with over 45 units of alcohol in their blood system will be designated a 'threat to the financial system'. They will be punished with a lifetime golf ban."
He added that the lifetime golf ban would also apply in Thailand.
The karaoke industry, which has annual revenues in Korea of $4 trillion, is outraged by the new regulations and is planning a protest march through downtown Seoul. Meanwhile bankers are still trying to swallow the news and work out a response.
As one Hong Kong-based investment banker put it: "This is serious. It will have a substantive impact on our deal pipeline. I have already spoken to our relationship managers in Seoul and they are at a loss as to how they will win mandates in the future. Most mandates are awarded at 1am and unless drinking is paced to an unnatural degree there is no way that you could keep within the regulations and still be out at 1am."
Client entertainment plays a critical part in the investment banking business in Seoul, and so these moves have bankers seriously worried. Statistics show that bankers go out with their clients around three times a week. "It's a vital part of doing business in Korea," said one irate banker.
The new regulation comes into force today (April 1).
