Citi’s forex executives holidayed as staff prepared for Brexit

Foreign exchange traders at Citigroup, the world’s biggest currencies-dealing bank, are pulling out the stops to prepare for next week’s UK referendum on EU membership and its potentially cataclysmic impact on sterling.

But as rank-and-file workers worked long hours, five of the bank’s most senior currencies executives each took between one and three days out of work around last weekend to drive their sports cars, including some Ferraris, through France.

The five executives, most of them managing directors, declined to cancel their annual “Ferrari Safari” road trip with two former colleagues.

The party included James Bindler, the global head of G10 FX — a set of currencies that includes the pound — and Okan Pekin, who heads the bank’s investor services group.

Two people who have talked to Citi employees about the holiday said they felt it was embarrassing.

“Everyone is entitled to a holiday” but the timing and nature of the trip was “insulting” to employees, one said.

Citi employees are frequently reminded that their conduct outside work reflects on the bank, the two people added. One said: “The optics here are bad.”

None of the sports-car enthusiasts responded to a request for comment. Citi said its preparations for the referendum “have been going on for many months, and they continue across all businesses”.

With polls suggesting that Leave could win, bankers across London are working long hours and poring over the small print of contracts to ensure the bank and its customers are not left with nasty losses in the event that sterling falls sharply.

The bank’s clients are clearly worried: 1,400 people dialled into a conference call by the bank on the matter on June 14.

Citi lost about $200m in the last major currencies-market shake-out, when the Swiss franc unexpectedly shot up in January 2015.

Some analysts think the June 23 referendum holds the potential for delivering a downward smack of similar size to sterling. Pockets of the options market show that traders are bracing for levels as low as $1.10 to the pound, which now trades just under $1.42. Certainly, a drop to about $1.30 is seen as likely in the event the UK votes to leave the EU.

UK government bonds have also struck record highs as investors clamber for safety and prepare for the chance of more easing from the Bank of England.

Bets against the pound doubled in the week to last Tuesday, according to data from the US Commodity Futures Trading Commission. The price of derivatives that reflect the scale of possible market moves have reached crisis-era highs, making it painfully expensive to hedge against a drop in the pound.

Citi has been working on contingency plans for the vote for some time. It, along with every other major bank, is planning to have staff work through the night when the results are announced to try to ensure minimal disruption. Some banks have booked hotel rooms for their staff, while the Bank of England has said it stands ready to offer extra liquidity to the markets to ensure they function smoothly.