Illustration by John Lee
On March 12 at 9 a.m., Sue Langley walked a mile across the City of London.
The U.K. nonexecutive chair of global insurer Gallagher had come for a breakfast meeting near Smithfield, a thousand-year-old marketplace where poultry and meat trading begins early each morning. After the meeting, Langley strode to the Walbrook Building, opposite Cannon Street station, where Gallagher rents 70,000 square feet of office space on the first and seventh floors of the bubble-shaped building’s nine floors. The walk took her past Paternoster Square, home of the London Stock Exchange, and down Cheapside, a shop-lined street that takes its name from the Old English for “marketplace,” to the Bank of England interchange, where six roads meet at a junction in the shadow of the gray stone columns of the U.K.’s central bank.
It was here, ducking down the alley that leads to her office, that she felt a chill.
The streets had emptied. Two-thirds of City workers were already gone.
“It dawned on me that this was real,” she says from her skylit office in the leafy suburban town of Berkhamsted, where she now works surrounded by five iPads, one for each of her five portfolio jobs. “You knew it theoretically, but physically — it just felt real.”
Langley is one of more than 500,000 people who commute to work in the City of London, with law firms roughly clustered in the west and insurance firms in the east. While big firms of more than 250 people employ 50 percent of the area’s working population, 99 percent of the 23,890 firms based in the district are small and medium enterprises, drawn to the area’s rich networks of financial services, lawyers, accountants, and prime office space, as well as its peculiar culture of shopping malls and fancy bars, ancient churches, and open space.
The City of London Corp., the governing body of the area and the longest-serving municipal democracy in the world, does not monitor footfall, and is unable to say how much the population of the area has declined since Prime Minister Boris Johnson ordered Britons to shelter in place on March 23. But to follow in Langley’s footsteps from the west to the east of the City of London during coronavirus is to visit a ghost town.
“It’s like Christmas Day every day,” says Jack Wainwright, on a 9 a.m. cigarette break around the back of the Walbrook Building on another Thursday morning, seven weeks into what the Brits call “lockdown.” Wainwright works in a back-office function for a nearby law firm, photocopying documents to send to lawyers and those higher up the food chain, who have long since holed up in homes in the suburbs. “When you look at the streets here, with no one in them, it’s like time stands still.”
In the front of the building, the stairs leading to Cannon Street station are empty even during rush hour, devoid of the streams of people who are the streets’ lifeblood. The only people on the concourse are train drivers, comparing notes about which supermarkets remain open for sandwiches in the long gaps that have opened up between jobs. Mark, a driver for the Southeastern line that operates from Cannon Street, says everything changed for him on the last train south out of the City to Hayes at 11 p.m. on Friday, March 20, the weekend before lockdown started. He had three passengers.
“Normally there’s about 300,” he says. “And that is when I realized. I was stopping at train stations where no one got off.”
The City of London, the smallest city in England, is the historic core and financial center of Greater London. If Langley had continued her walk on March 12, rather than stopping at the Gallagher office, in no more than another ten minutes she would have reached the far boundary of the City at Aldgate, the easternmost of seven Roman gates along the old perimeter of the London Wall. In its 2,000-year history of trading, the City has withstood plague, fire, aerial bombardment, civil war, riots, and terrorist attacks, each time reemerging with the scars of upheaval stamped into its architecture, its streets, and its open spaces. After coronavirus hit financial centers, and workers fled to their homes for an indeterminate, foreseeable future, the empty offices they left behind beg the question:
What is a city without its people?
For nearly 30 years, Rees was the single most powerful man in shaping the development of the Square Mile, from the eve of deregulation of financial markets in 1985, to 2014, when he retired from his post as city planning officer at the City of London Corp. Under his watch, the corporation reshaped the ambitions of foreign investors who would, over three decades, have transformed the Square Mile into a graveyard of cold glass towers. Instead, it modeled the City on London’s theater heartland — the West End — welcoming a mixture of bars, shops, and restaurants to attract young people to come there to work.
“Everything is in a state of flux,” he reports by phone from his two-bedroom flat, which has a panoramic view of north London stretching from Hampstead Heath to Epping Forest on one side and sightlines through to Canary Wharf, London’s other major business district, on the other, though that view is being slowly crowded out by new skyscrapers around Aldgate. “From the time the Romans established London, it has coped with disaster.”
Each time, the City has been rebuilt and adapted for an unplanned future. Its development into a trading center accelerated in the 14th century, when the Black Death killed as much as 50 percent of the population of England, causing labor shortages that forced the English economy to switch from agriculture to wool. Wool and cloth made England rich, populating its green and pleasant land with magnificent churches in the Cotswolds and East Anglia. Meanwhile, the City evolved as a center of trade and of credit, advancing capital to tradesmen in many other parts of the country.
The coronavirus may have already peaked in some parts of the world, but the plague rolled on for centuries. The last major outbreak in Britain was the Great Plague of 1665, which wiped out a quarter of the population of London. The following year, the Great Fire of London gutted 80 percent of the City of London from inside the old Roman city wall, with temperatures reaching 2,280 Fahrenheit at its starting point in Pudding Lane on the north side of the London Bridge. From the ashes of the Great Fire came the infrastructure of today’s City. Beginning in 1691, Lloyd’s Coffee House on Lombard Street, just off Bank interchange, became the center of the world-leading insurance market — not far from where Gallagher sells insurance today. Sir Christopher Wren rebuilt St. Paul’s Cathedral and 51 city churches, including the inconspicuous St. Stephen Walbrook, considered to be his masterpiece, which Langley looks down on from her office. It was here, 300 years later, that Langley noticed the City fading as it headed toward another disaster.
By the time Langley walked across the City in mid-March, many international firms had already sent people home. Nikhil Rathi, chief executive of the London Stock Exchange, says the LSE was keeping a close eye on events in China toward the end of 2019. The LSE is part of a global group of companies with operations across Asia and in Italy. It owns the Borsa Italiana, which is headquartered in Milan, a few miles from the center of the Italian outbreak. “As a global group, we had to take steps to work from home in our Asian offices very early,” Rathi says. “Then, as the situation worsened in Italy, our Italian colleagues began working remotely. We knew this was on the horizon and we were able to draw on international experience.”
When Italy declared a lockdown on March 9, the LSE started moving its critical functions to secret locations known as business-continuity or disaster-recovery sites, which many City firms set up after terrorist attacks from the Irish Republican Army in the 1990s. These attacks on commercial targets during the period known as the Troubles were intended to put pressure on the British government to negotiate a withdrawal from Northern Ireland. They escalated in 1993, when the IRA detonated a truck bomb on Bishopsgate, wrecking Liverpool Street station and the NatWest Tower.
In the aftermath, the City of London Corp. implemented a “ring of steel” around the Square Mile, consisting of road barriers, checkpoints, and several hundred CCTV cameras. The banks, meanwhile, set up disaster-recovery sites outside the city, with the idea that traders with critical roles could be evacuated and continue their work at a replica of their normal desk. Ever since, banks have been locked into never-ending cycles of disaster-recovery testing: Every three or six months, each desk sends someone to visit the dormant office to check that the machinery works.
When coronavirus started drawing closer to the City in March, many banks and other financial institutions slipped into the disaster-recovery protocols they had been practicing for decades and moved people to alternative offices.
They had not yet grasped that coronavirus required a different approach. People in nonmarket-facing roles were the first to be encouraged to stay home. On March 12, Joren Herremans, a digital marketing manager at RBS, left his office near Liverpool Street to work from home like usual on a Friday. He remembers thinking he might not be back for a while. “I don’t have anything in the office that I need for my day-to-day job,” he says. “But I would never have expected that I would be away for this much time.”
At the same time, traders were dealing with historic volatility as the global economy slipped into a deep recession. In the U.S., the Federal Reserve slashed interest rates by a full percentage point before markets opened on March 16, triggering the steepest stock market declines since 1987. Traders and market makers were dealing with record-breaking corrections with legacy technology and financial regulation that made it impossible for many to be away from the trading floor. Many were moved to disaster-recovery sites or told to keep coming into the City, despite voicing frustrations.
“A lot of people were getting pissed off,” says Ali Raja, a fixed income credit portfolio manager at the Pension Protection Fund, which has an office just down the street from the Walbrook Building on Cannon Street. “People were asking why they were still doing the commute. Someone was coughing and people were getting freaked out. Someone else’s kids went to Italy and people said they should stay home.” Raja had to wait to get set up with a laptop so he could work from home. As the days dragged on, he began to feel more and more concerned. “I was getting a bit worked up because my partner is a teacher and they had kids coming back from trips. It was starting to play on my mind.”
European Union law mandates that traders must record all calls so market regulators can monitor for abuse, including insider trading. Some banks still ban cellphones on the trading floor, where staff keep personal phones in lockers and use a specialized telephony key system called a trading turret to make calls. When Johnson finally mandated a nationwide lockdown on March 23, some banks kept their London trading floors open, insisting that traders were key workers.
But bankers are not butchers. They trade numbers on screens, not meat on hooks. Eventually, the European Securities and Markets Authority, the EU market watchdog, advised traders to start taking written notes and to tell clients that calls were not being recorded. “If people weren’t allowed to execute at home, and there’s no one in the office, then there is no market,” says Andy Soper, a former global head of forex options trading at Crédit Agricole. “And that would have caused complete chaos.” Meanwhile, traders were facing two major challenges posed by home working: speed and security. Soper says, “Is your broadband good enough? Is there any latency? Clearly, if you’re trading and the real-time information is off, then you might not be aware of it and you might not catch something and there might be breaks.”
The second risk, of security breaches from phishing and hacking, is ongoing. The Financial Conduct Authority, the U.K. banking regulator, says that cybercriminals are increasingly exploiting coronavirus for their own gain. It urges firms to implement enhanced monitoring to protect endpoints and to secure network connections and video conferencing software. But in the turmoil, things have been messy. One hedge fund executive says his company has received a slew of phishing emails since the firm transitioned to homeworking, including one that was a perfect imitation of the chief executive’s emails, copying an internal marketing director, requesting an instant transaction for payment of work that didn’t exist.
While traders at smaller banks confided that legacy systems had inhibited their ability to maintain liquidity during market volatility, most of the bigger firms rapidly invested in digital infrastructure to plug any technological gaps when it became clear that there was no option but for people to work from home. Rathi says throughout March, the LSE moved quickly to buy and deploy the additional equipment, including screens and telephone lines, to make sure staff could work from home during the worst of the selloff. “That was the extraordinary dimension to the whole thing,” Rathi says. “We saw three once-in-a-generation corrections in the course of two weeks.”
If the hardware was a scramble, the circuit breakers and price-monitoring systems for dealing with high-level volatility were already in place. Rathi says the LSE took extra steps to ensure that markets continued to function, maintaining a constant dialogue with market makers in case any rules needed fine-tuning. When the market was at its most volatile, the LSE adjusted spreads in the ETF market so market makers could continue to quote. It made it easier for companies to cancel dividends when the need to convert cash became a critical priority, and supported work going on elsewhere in the sector to make capital raising easier.
“We were as proactive as we could be, recognizing that this was unchartered territory,” Rathi says. But, he adds, “I [didn’t] think any of this was imaginable!"
Langley says coronavirus has forced the City to prove it works remotely, “not by any grand plan, but by necessity.” Before lockdown, Gallagher was struggling to find appropriate office space to combine its three London offices to create a uniform culture across the business. “I would question that now,” Langley says. Forced to disperse completely, the firm has instead relied on video messages, online quizzes, and other activities to help staff feel connected.
“I think a lot of organizations are asking themselves today: What is the point of the office?” she says. “And if it’s not client interactions or customer interactions, it must be about social interactions, a sense of belonging, and culture.” The office, she says, will be redesigned. “Forget fixed desks and workstations. There will be far more of the Google landing spaces. London will become more WeWork-like.”
Maria Nazarova-Doyle, head of pension investments at Scottish Widows, is saving an hour and 20 minutes each way on the commute to the office in the City. Her weekly trips to Edinburgh have been replaced by video calls. Now that she has invested in a proper office chair and turned the old nursery into a tiny home office, she says she is “definitely set up for the long term” — and no longer sees the point in traveling 300 miles to visit the Edinburgh office every week.
“I am thinking, why would I want to go to Edinburgh every week like I used to? I will definitely not travel as much, which will be better for the environment and improve my quality of life.” There is just one thing she misses about working in the Square Mile: the sushi. “I’m dying for some sushi for lunch,” she says. “That was worth the commute!”
For Raja too, the benefits of the office environment have disappeared. “Why would you want to travel to a huge building with so many people?” he says. “I have thought, what if I go to a remote part of France? I just need a high-speed internet connection and I could work from there. I could set up anywhere in the world. I could be in Thailand.”
Rees says people will never go back to working in the same office from 9 to 5, five days a week: “They’re going to be working at home some of the time, and working on the move some of the time, and even when they are working at the office they may not be working in the office — they might be in the coffee bar or in one of the open spaces we’ve created throughout the City.”
The day before he talks to Institutional Investor, Rees gives a speech at a global conference called Adapting Urban Density in the Age of Pandemics via video link. He is allowed to show only two images in his short presentation. He chooses one of Cutlers Gardens, a five-acre estate in the eastern part of the City. In the ’80s, Cutlers Gardens was turned into an apartment and office complex with landscaped gardens and courtyards modeled on the original layout of the area’s 18th-century warehouses. Then in 2006, developers transformed it into a multi-use campus environment of offices, shops, and homes. It put a roof over the Western Courtyard to create a covered piazza, where workers can have meetings outside year-round. “We will see an awful lot more of that,” Rees says. “People quite like that informal style of working. That’s what the startups have brought with them: a culture where people do work while they’re sunbathing on the roof or playing five-a-side in the street or in the coffee bar. It’s a very flexible mix of leisure, socializing, and work.”
Startup culture, socializing, and sushi: These are the things the City of London offers workers that they might not get at home. Rees likes to tell people it’s the spaces that make a place. Buildings are necessary for accommodation, he says, and good architecture is “the icing on the cake.”
“But if you have good spaces that are permeable and accessible, people will go there and they will start to gossip, and once they do, you’ve got a successful place. But it’s easy for me to say that,” he adds with a chuckle. “We’ve had 2,000 years of practice to get it right.”
