Minos Zombanakis, the creator of Libor, dies at 92

Minos Zombanakis was a pivotal figure in the history of the Euromarket. Known in the 1970s simply as "the Greek banker" (he was reckoned to be the only one of any note on the international scene), he was a combination of financial visionary, smooth salesman and masterful self-promoter.

As one rather hostile magazine article remarked about his assault on the syndicated loans market: "It was one part nerve, one part histrionics and several parts pure fluff, but it did the job."

When Zombanakis established Manufacturers Hanover in London in 1969, the Eurodollar syndicated loan market was just getting off the ground. But so quick was he to latch onto it that he was subsequently seen as its inventor, even though an international syndicated credit had been put together for Austria at least a year earlier.

Zombanakis, however, was certainly the first banker to make full use of syndicated loans. Within a few months he was raising substantial amounts for Iran and Italy, beginning with the ground-breaking $200 million five-year loan to the state-owned financial agency Istituto Mobiliare Italiano (IMI) in 1970, with the interest rate recalculated every six months at 0.75% above the prevailing interbank rate.

His deal-getting owed much to his legendary talent for networking - the friendship he cultivated with Bank of Italy governor Guido Carli, for instance, came in very useful, and he now counts numerous former finance ministers among his close personal friends. In the 1970s, he claimed to be able to telephone finance ministries all over the Middle East and Europe and say "I'm coming in" and habitually go straight to the top. "Before I talk to the angels," he'd say, "I want to talk to God."

While not a regular on the cocktail party circuit, Zombanakis's personal magnetism was such that those parties he did attend appeared to have been held in his honour. Signing ceremonies for deals in which he was scarcely involved would be held up until he arrived. Then there might be some theatrical gesture and the words: "Gentlemen, now we sign." He was the first man to publicize his syndicated credits with tombstone ads and went to great lengths to cultivate the Euromarket media.

The extent of his success was a little bemusing to those sceptical of his understanding of the products he was selling. "There are people whom dollar bills will pursue down the pavement," says one who has worked with him, "and he is one of them. He is someone with whom money has always felt very comfortable."

Yet at the same time, Zombanakis had always been very conservative with his money. He never went in for conspicuous consumption or the jet-set lifestyle. For relaxation, rather than Monte Carlo, he prefered fishing with his childhood friends off Crete (one of his best friends, he said, was a retired fisherman "an uneducated third-grade person" whose mother breast-fed young Minos while his own mother was ill). He regularly went home for lunch, and when he did eat out, he favoured simple Greek restaurants. He was actively involved in the Greek Orthodox church.

Minos Zombanakis was born in 1926 at Chania, on the north coast of Crete, where his parents farmed 100 acres (he speni three months there each summer, and distributed two tonnes of his home-grown olive oil to friends each year). During high school - which involved a 10-mile bike ride each way - he worked as a waiter at a British naval base two miles from his village, "getting up at dawn, walking there, fixing breakfast, shining the shoes of the officers, doing whatever". In the process he started learning English.

In 1943 Zombanakis travelled to Athens to go to university, but it being wartime, the teaching was sporadic and the food scarce. He lived with a grandmother and did manual jobs to feed himself. His far from shy and retiring manner would soon come to his aid, however. In 1945, having asked an English officer he met in the street for a job, he travelled in an Army truck to southern Greece to help distribute food.

Two years later he talked his way into a job as a "credit specialist" with the American economic mission to Greece, interpreting and liaising with the central bank. "I worked 15 hours a day," he remembers, "and wore a flannel pair of pants, a blue shirt, a blue tie and a sweater - that was all I had. I ate eggs for breakfast, eggs for lunch, eggs for dinner, to the point where the doctor said that was why I'd developed bubbles on my skin."

In 1949, aged 23, Zombanakis was drafted into the Greek army, still without having finished his degree. He briefly saw action in the Greek civil war and later in the Korean War between 1950 and 1951, from where he returned as a lieutenant.

On leaving the army, he joined the Greek delegation in Washington checking the implementation of the Marshall Plan. But by 1955 his thoughts turned once again to his studies. Having completed only two years of his degree, Zombanakis was advised that the only graduate school that might accept him was Harvard. So he asked his girlfriend from Athens to come over to America and marry him, then packed all his possessions into his rusty black Chrysler and drove up to Cambridge, Massachusetts.

The Dean at Harvard told Zombanakis that he couldn't register without a degree, but no was not an answer he'd take. Eventually he badgered them into letting him pay the fees of $800 (his savings at that time amounted to some $2,500) and simply "follow" the course, with no guarantee of a degree. After six months, having consistently come top of his class, Zombanakis was awarded a scholarship to study for a degree. He was later voted "class marshall" (the student who leads in parades) and came away after two years with a masters in public administration.

Next it was off to Lebanon after his friend, prominent city planner Constantine Doxiadis, offered him a job as an economist on a housing survey. When the revolution started a year later, however, he decided to get out and try his hand at banking. He chose Manufacturers Hanover Trust because it "was a small bank, and had never had anything to do with the Middle East, and I thought I could be of some use".

In 1958 he moved to Rome to become the bank's representative in the Middle East. "Basically it was like shooting ducks," he said. "Because I was from the area - a Greek - I suppose people subconsciously wanted to help me." He built up relationships in Turkey and Egypt and persuaded Manufacturers Hanover Trust to make a loan to Iran when the country did not even have enough reserves to cover a month's imports.

Zombanakis later became one of very few bankers invited to the Shah's celebration of the 2,500th anniversary of the Persian empire. Around 1962 he added Europe to his responsibilities, and eventually he became Manufacturers Hanover Trust's senior foreign representative. In 1968 Zombanakis suggested to his bosses in New York that they give him £5 million ($8.3 million) to start a new merchant bank in London to carry out syndicated financing. "At the end," he recalls, "the chairman of Manufacturers said 'I still don't understand what you're trying to do, but I'll tell you something, I'm convinced that you know what you want to do, so go ahead and do it'."

The new bank was jointly owned by Manufacturers Hanover Trust, NM Rothschild (which also provided investment banking expertise) and Riunione Adriatica di Sicurta, a large Italian insurance group, whose chairman, Ettore Dolli, has been described as Zombanakis's mentor and the man who goaded him into the new venture.

In 1972 Zombanakis moved to First Boston, doubling his salary to $150,000. As managing director of First Boston Europe, he arranged $1.5 billion of syndicated Eurodollar credits in his first full year (an achievement only narrowly bettered by Citibank) and became the most talked-about investment banker in Europe. When the oil crisis in 1974 precipitated a fall off in the syndicated loan business, Zombanakis turned his attentions to the Middle East.

He became the first banker to do a major private placement with the Saudi Arabian Monetary Authority and organized for First Boston to become the National Commercial Bank of Saudi Arabia's adviser. First Boston went on to advise the Saudi Ministry of Finance and the Nigerian government. Zombanakis's personal style proved peculiarly suited to gaining the trust of less developed countries without preaching to them. His input once the relationship had been established often went little further than hiring the person to handle it.

Hiring the right people, though, had always been a particular strength. Jibes might have been levelled at Zombanakis's apparent lack of technical wizardry, but no-one could deny that he was extremely adept at surrounding himself with very able technicians. Not least of these was Richard Butler, who followed through on the tie with the Saudi National Commercial Bank, and later moved with him to INA.

Zombanakis never much cared for people management, however. "I don't care if a guy sits at his home," he once said, "as long as he comes in three days later and says, 'Hey, while I was digging the garden I thought we should go and make this proposal.' That's all I'm interested in."

Zombanakis left First Boston in 1978, disenchanted with the lack of support he was receiving from the corporate finance department in New York and less than enthusiastic about the proposed tie up with Credit Suisse.

He became chairman of INA Corporation's investment banking subsidiary Blyth Eastman Dillon, where one of his first contributions was to talk the firm out of renting expensive new office space in London's Bishopsgate. "When it gets hot," he advised the firm's officials, "we'll just open up the windows."

Blyth was not a success, there being no shortage of investment banks at the time. It was eventually sold to Paine Webber, and in 1985 Zombanakis decided to start his own consultancy, having been asked by the Saudi government to advise them on a lucrative retainer basis. He had been doing that ever since, along with advising a host of other organisations, including Chemical Bank, Chase, NTT and Harvard University.

He took any opportunity to talk with policymakers around the world, and regularly hosted his own seminars in Athens. This is the world in which he felt happiest: "I was never after making money for its own sake," he said. "I always had side interests in my life. I would never for example go on a trip to India to make a billion dollars if I knew that there was a very interesting symposium at Harvard where I might learn something."

sources:euromoney.com, kathimerini.com