Italian lessons

Susan Livingston, partner, BBH credits much of her successful career to her experience in getting to grips with a settlement crisis
By Editorial
Susan Livingston

Susan Livingston, partner, BBH credits much of her successful career to her experience in getting to grips with a settlement crisis

Some people spend years trying to find their calling. For Susan Livingston, all it took was to be in the right place at the right time—with a valid passport. Joining Brown Brothers Harriman in 1985, Livingston was thrust into the heart of the Italian settlement crisis. Although hired for a domestic role at the venerable private bank, Livingston made no secret of her desire to work internationally. With trades remaining unsettled for months at a time, BBH needed boots on the ground in Italy, and Livingston, who describes herself as “an internationalist” and had spent considerable time in Europe, was the perfect candidate.

Fluent in French and German, Livingston utilized her sensitivity to European cultures to gain entry into the back office of both Italian settlement banks and brokers when most global custodians were stuck in the “foreigners room.” Despite possessing what she describes as only “rudimentary” Italian, Livingston was able to achieve a 100% settlement rate in Italy for BBH.

At a time when the entire system was manual and paper-based, when shares required a physical stamp called a “fusatto bolato” and settling trades within the monthly settlement period or “liquidazione” required a huge amount of legwork, Livingston understood that a personal touch was needed. “I took taxis all over Milan, flew to Rome to meet with the Italian SEC (Commissione Nazionale per le Società e la Borsa – CONSOB), generally known as CONSOB or the Italian SEC., had multiple espressos and lunches with all the counterparties to get our clients’ trades settled,” she says.

Spending at least a week out of every month in Milan, Livingston was able to take a broader view on how to approach settlement in Italy. This experience would prove crucial to the growth of BBH’s emerging markets funds custody business. “Using a similar approach later in Spain and then emerging markets like Brazil, Indonesia and China, Brown Brothers Harriman distinguished itself by working closely with local counterparts and trying to improve the experience for foreign investors,” she says.

Livingston is quick to place the Italian crisis, which had such a profound impact on her personal career trajectory, in the broader context of the securities services industry.

“The Italian crisis helped U.S. mutual fund boards focus on settlement and operational risks,” she says. “This in turn led to the second most important watershed event: Automation and standardization of securities trading.”

“When I look back over my 32 years in banking, the automation and standardization of securities trade instructions is a major watershed development—still ongoing, something we now take for granted, but an enormous improvement over conditions in the early 1980s when I started in the business,” she says. Livingston points out that the manual system, under which each securities trade was handled manually at least 12 times from start to finish, had a much lower capacity. When the market crashed in 1987, “the entire system shut down due to its manual nature.” Fax machines broke, and brokers stopped answering calls. “We could never handle the volumes of trading today based on the old paper based system,” she adds.

In a career that has been predominately focused on emerging markets, Livingston has racked up thousands of frequent flyer miles and witnessed the creation of the post-Cold War order. “I attended the first stock exchange session in Warsaw when our client purchased the single stock listed: Universal. It was the first stock traded after World War II in Poland,” she recollects, fondly. “I was in Berlin the day of German Reunification for SWIFT’s Sibos conference. What a great party!” Livingston witnessed the opening of markets across Eastern Europe and Asia, including “some of the first mainland Chinese stock offerings.”

Despite these “once in a lifetime opportunities,” she says, visiting new markets was not always such a pleasure. “The things I dreaded most were visits to pre-emerging markets where I feared my client’s stock might or might not show up on a share register somewhere,” she says. To top it off, safe passage was not always guaranteed. “I also dreaded flying on those questionable airlines—like the Eastern European jet that had an ‘escape rope’ instead of an escape slide.”

On balance, however, Livingston sees her three-decade banking career as “a wonderful adventure.” Still an active partner at BBH, Livingston serves as a firm ambassador managing C-suite, board and government relations. Living with her family in the picturesque coastal town of Marblehead, Massachusetts, famously the birthplace of the American Navy, she serves on the boards of the Investment Company Institute and BBH Mutual Funds, as well as non-profits such as the Museum of Fine Arts in Boston, Scenic Hudson and the Johns Hopkins German Institute. Having spent the mid-nineties managing BBH’s subsidiary in Luxembourg, Livingston is now the Duchy’s Honorary Consul to Massachusetts.

Recently featured in the A&E channel’s Biography series, Livingston is a role model for women entering financial services. “When I began a career in banking in the early 1980s, I hardly imagined I could have met so many interesting people, travelled so much and learned something new every single day,” she says.

–Richard Schwartz

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