The recent upheaval in foreign exchange markets came as no surprise to Walter Wriston.
Although the former Citicorp chairman did not exactly predict the day and hour of the crisis, his new book explains why traders have gained more influence than governments over the currency markets.
In Mr. Wriston's view, living in an information age changes everything. Massive amounts of data move around the world at the speed of light, altering the relationship between nations, between governments and citizens, and between corporations and regulators.
"It's really incredible," he said, shaking his head as he talked about the battle between the dollar and the German mark.
"In the old days, a finance minister would call a press conference and say, |I'm opting out' " of the exchange system. "The difference today is that you can say you're opting out, but the screens will still light up and the traders are still going to trade."
The information age, Mr. Wriston argues in his book, "The Twilight of Sovereignty," has humbled governments as much as corporations. The Soviet leaders could not revitalize their economy as long as it was isolated from information-based societies. Once their citizens got access to information, the old order couldn't stand.
Likewise, said Mr. Wriston, the trend toward global markets is inexorable, much as nations might wish to wall themselves in.
For banks, which still make money on financial intermediation, the information age has special significance, he said.
"It permits the chief financial officer of XYZ Corp. to know as much about the credit ratings of GM or Citicorp as anyone," he said. As a result, GM can bypass the banking industry in raising money.
|Cat's Whisker' to Satellite Dish
The information revolution came alive for Mr. Wriston one day in 1931 when he wound a coil around a Morton salt carton and added a "cat's whisker" and mail-order crystal to fashion a crude radio.
That radio brought him news of the outside world and it gave him a glimmer of the future at Citicorp, where he would get news through a network of computers, satellite dishes, and cables.
Mr. Wriston, 73, has aged a bit since he turned the nation's largest and most powerful bank over to John Reed in 1984, but he still has the same patrician demeanor, towering frame, and confident smile.
He wears a Citicorp tie clasp, but said he does not miss life in the industry's fast lane. "There is a season for everything," he said.
Calls Franchise Highly Valuable
Despite the well-publicized problems at Citicorp, Mr. Wriston said he has "every confidence" in his successor, Mr. Reed.
"The fellow is coping with a very difficult situation," Mr. Wriston said. Citicorp's global franchise is valuable and "when the problems are over - and I have no doubt they will be over - they will have a franchise like no other in the world."
Always a devout conservative, Mr. Wriston's strong antitax views haven't changed much. He plans to vote for President Bush, but reluctantly. The President, he said, has virtually no domestic policy, no strategy for economic growth. And regulation has grown during the Bush administration.
Arkansas Gov. Bill Clinton, he said, "is a very bright and articulate person" who seems to appreciate the importance of technology. But Mr. Wriston does not share the Democratic nominee's expansive view of the government's role, including his proposal for a nationwide fiber-optic telecommunications network.
"We have more fiber-optic cable in California than in all of Japan," said Mr. Wriston. "And we don't need the government to tell us how to build it."